NOMURA ON AUTOS<\/p>\n
GST rate cut could lead to more upside<\/p>\n
Highest upside potential for M&M, Maruti, Ashok Leyland & TVS<\/p>\n
Within suppliers, preference for domestic cos (Uno Minda, Samvardhana & Sansera)<\/p>\n
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REPORTS ON LIKELY GST RATE CUT<\/p>\n
Auto sector could potentially see a reduction in tax rate<\/p>\n
Rate for ICE small cars & 2-wheelers to reduce to 18% from 28%<\/p>\n
Large cars could see a reduction from 43-50% to 40%<\/p>\n
Risk of motorcycles of more than 350cc may see an increase to 40% GST rate from 31%<\/p>\n
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GST RATE CUT & THE IMPACT<\/p>\n
May have a multiplier effect of 1-1.5x, implying 5-10% increase in demand<\/p>\n
Popular models are likely to see sizable price cuts<\/p>\n
WagonR may see price cut of 9%, Bolero by 10%, Brezza & Creta by 3% & XUV700 by 7%<\/p>\n
Exposure to small car slab at 68% for Maruti & 52% for M&M incl LCVs<\/p>\n
In anticipation of tax cut, sales have slowed down substantially<\/p>\n
GST revenue loss impact of such a move likely at \u20b974,000 cr<\/p>\n
Assuming 10% higher volumes, the loss reduces to \u20b954,000 CR<\/p>\n
\u00a0<\/p>\n
LIKELY GST RATE CUT: MAJOR BENEFICIARIES<\/p>\n
Benefit is likely to be larger for 4W OEMs than 2W OEMs<\/p>\n
2W OEMs likely to face costs related to ABS implementation<\/p>\n
ABS mandate may shave 50% (\u20b93,000-4,000) off the benefit by next year<\/p>\n
Eicher which already has its portfolio on ABS, may benefit more from a GST cut<\/p>\n
100-150 bps margin improvement potential for all 4W OEMs<\/p>\n
OEMs with domestic exposure are likely to benefit the most<\/p>\n
\u00a0<\/p>\n
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LIKELY GST RATE CUT: IMPACT ON AUTO COMPONENT COS<\/p>\n
Domestic suppliers are likely to see benefits in the form of higher volumes<\/p>\n
May enjoy better pricing power in aftermarket<\/p>\n
\u00a0<\/p>\n
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GST RATE CUT & THE IMPACT ON EVs<\/p>\n
Negative for EV OEMs, price gap between ICE & EVs could increase<\/p>\n
Could push back EV adoption by 2-3 yrs<\/p>\n
It can be addressed by giving a demand incentive to EVs<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"NOMURA ON AUTOS GST rate cut could lead to more upside Highest upside potential for M&M, Maruti, Ashok…\n","protected":false},"author":2,"featured_media":51984,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,99,61768,61769,61772,61767,61775,61770,25699,171,61773,1487,3836,19667,61774,61771,1611,18964,1490,37036,3835],"class_list":["post-81491","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-au","tag-australia","tag-business","tag-cochin-shipyard-share-price","tag-garden-reach-share-price","tag-gng-electronics-share-price","tag-hindustan-aeronautics-share-price","tag-info-edge-share-price","tag-irfc-share-price","tag-it-stocks","tag-markets","tag-nazara-tech-share-price","tag-nifty","tag-nifty-50","tag-nifty-it","tag-online-gaming","tag-pg-electroplast-share-price","tag-sensex","tag-sensex-nifty-today","tag-share-market-today","tag-stock-market-live","tag-stock-market-live-updates"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/81491","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=81491"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/81491\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/51984"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=81491"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=81491"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=81491"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}