When I did a post on the same topic 5 months ago, the data then suggested that there can be quite a good amount of easing when it comes to semi conductor shortage. But it seems like the issue is still continuing.
Tata Motors also talks about the same thing and says that the issue may persist in the coming fiscal year :
But are Auto Stocks gonna underperform because of this ?
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My guess would be , No.
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We have seen quite a good amount of headwinds in this sector and after making panic bottom, the sector is slowly recovering pricing in most of the negatives including war related headwinds in europe n fresh covid surge in china.
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will they rally ? if the conditions ease within this fiscal, then yeah, i think we may see a good recovery in auto space esp the beaten up ancillaries
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with semiconductor shortage after cost and production for many companies, but the point to be noted is there are hungry buyers waiting to buy once the situation eases. So, yeah once the supply constraints ease, we may see roaring demand for both vehicles n consequently auto stocks .
My Assessment
- I think I will accumulate auto and auto ancillary stocks with a timeframe of 1-2 years keeping in mind that most of the negatives for the sectors are priced in and potential pent up demand in the coming months.
Do share your views and bets in this sector