Struggling to switch gears

▶ Auto and auto ancillaries faced the double-whammy of demand slowdown due to the second wave of Covid-19 and record high metal prices

▶ Despite a YOY jump in sales in Q1FY22, the industry’s net sales were lowest in four quarters and 10% lower than the June 2019 quarter, excluding Tata Motors

▶ The biggest knock-on effect for companies was on margin. Automakers’ core operating profit margins hit a 5-year low due to a combination of lower volumes and high input costs

▶ Next three quarters may be better, but FY22 revenues may stay below FY19 level

▶ Tata Motors may be an outlier, thanks to its UK subsidiary Jaguar Land Rover