Entering 2021 there was consensus expectation for volume recovery post COVIDand only first hints of a semi shortage. However, 2021 was ultimately shaped by thelatter and the automaker's realization of the power of pricing. As a result, volumeswere challenged (car production - flat y/y) but profit margins rich for OEMs whilesuppliers issued multiple profit warnings. Stock prices reflected this with EuropeanOEMs outperforming AutoParts suppliers by about 38ppt. This was also observedin the US where OEMs outpaced suppliers by about 44ppt. Thinking about 2022, wesee supply conditions improving but still capping growth. Coupled with optionalityfrom auto 2.0, much better customer adoption rates (electric, connected, digital),we believe market concerns about the risk from worsening pricing on OEMs maybe overblown. In fact, we see conditions for automakers remaining positive formuch longer: Demand is strong, Inventories remain tight, EVs being rolled out andboosting ASPs, recurring revenue streams develop, distribution models arechanging all of which we see having a smoothing impact on the economic cycle. Wetherefore do not just see earnings growth (~35% for EU automakers) and strongcash flows (a combined EUR >30bn for EU OEMs) but also opportunity for multipleexpansion. In the US, there are multiple potential EV and AV catalysts on the horizonwhich could help automakers unlock value.