Title: The crude challenge: the influence of oil prices on automobile industry dynamics

Authors: Debanjalee Bose; K. Sakthi Srinivasan

Addresses: Vellore Institute of Technology Business School, VIT University, Vellore 632014, Tamil Nadu, India ' Vellore Institute of Technology Business School, VIT University, Vellore 632014, Tamil Nadu, India

Abstract: The research examines how crude oil prices affect automotive sector stock prices, using ARMA and GARCH models for detailed study. It finds that companies react differently, underlining the challenges of predicting stock trends amid economic shifts. The study also notes an absence of consistent volatility patterns across companies, indicating diverse volatility behaviours. This research significantly advances our understanding of crude oil's subtle effects on automotive stocks, suggesting further areas for detailed analysis and model improvements. This study aims to analyse the effect of crude oil prices on the automobile industry's stock volatility over 18 years, using data from Yahoo Finance. The study selects nine key companies from the NIFTY 50 automobile indices for understanding the volatility. Advanced statistical models like ARMA, ARCH, and GARCH are employed to assess the impact of crude oil price fluctuations on stock prices, aiming to explore the patterns, trends, and relationships between crude oil prices and stock performance.

Keywords: crude oil prices; automobile industry; stock volatility; ARMA; GARCH; econometric models; market dynamics; statistical analysis.

DOI: 10.1504/IJPM.2025.146720

International Journal of Procurement Management, 2025 Vol.23 No.3, pp.360 - 384

Received: 12 Apr 2024
Accepted: 07 May 2024
Published online: 16 Jun 2025 *

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