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ARB - ARB News Story

A$37.11 0.5  1.3%

Last Trade - 7:10am

Sector
Consumer Cyclicals
Size
Mid Cap
Market Cap £1.64bn
Enterprise Value £1.62bn
Revenue £286.2m
Position in Universe 158th / 1902

BUZZ-New car sales could put damper on Christmas for Aussie small-cap auto sector - Citi

Fri 4th December, 2020 3:55am
** Citi says increased demand for new cars over the holiday
season could spell trouble for the Australian small-cap auto
sector
    ** The research broker notes a significant increase in new
car sales in Australia in November, as consumers are planning
domestic holidays where a significant portion will include
driving
    ** Says should new car sales continue to increase it could
be negative for Bapcor  BAP.AX  and the majority of GUD's
 GUD.AX  businesses as new cars are typically serviced at dealer
garages, and have less wear and tear relative to older cars
    ** However, brokerage says used car prices have been
accelerating since June, driven by a lack of new vehicle supply
due to factory closures, as well as an increased demand for
personal cars as people avoid public transport
    ** Increased demand for used cars post COVID-19 disruption
positive for Bapcor  BAP.AX  and GUD  GUD.AX  as both firms
target cars, which are >5 years old, and older cars are more
likely to be serviced at independent workshops - Citi
    ** Bapcor remains Citi's top pick in the small cap auto
sector, given its 'less discretionary' auto products, and clear
long term growth strategies with its private label expansion and
Thailand rollout
    ** Research broker forecasts ARB's  ARB.AX  2Q21 sales to
increase by 16%

 (Reporting by Arundhati Dutta in Bengaluru)
 ((arundhati.dutta@thomsonreuters.com;))
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