Skip to main content

India's growth in terms of Automobile sales

 India's growth in terms of Automobile sales





Hello readers,

India Car sales growth story

Car sales growth numbers we considering as reflection of  growth story of Indian household and economy. As we looked over numbers there is no great story.

2006 Car sales- 1.31 Million units

2020 Car sales- 2.43 Million units

Average annual growth rate was only 5.22%

As we look car sales growth as economy's growth then we not grow in last 10 years or slightly grow. Our consideration of car sales growth is direct reflection of growth in lifestyle of citizens, we may wrong also for this consideration. 




As we take base year 2012/2013 to compare growth in Auto sales then result is there is zero or near zero growth in 2021.

Below are car sales numbers year-wise (Million units):

2011- 2.5
2013- 2.7
2015- 2.6
2017- 3.0
2019- 3.1
2021- 2.71

As compare to Brazil which which having similar numbers of car sales like India in Emerging market class. So If we compare both country's stock index then we reach to conclusion India's overall stock index is over-valued. But many of you can say this decline in number is due to pandemic. Actually pre-pandemic picture for automobile industry was not good. Below are statistic of pre-pandemic time.



But thing is global car market also showing similar trend. As we saw 10 years long consolidation in car sales we may going for breakout record break car sales in upcoming years. The reason is high salaried IT professionals and boom in IT recruitment in recent time and along with high returns from stock market in recent boom. India's Auto index may out perform overall index as below chart indicates.


Another possibility-

As analysing anything we have to check possibilities through 360 degree. So we are going to check another possibility if above mention good picture fail to become reality.
As India have critical taxation system and have very high tax on luxurious commodity like automobile and reduction in purchasing power of citizens due to pandemic, availability of public transport like Metro & Mono-rails in Tier 1 cities ongoing projects and higher inflation peoples may avoid to buy cars. India witness growth in sales of premium cars (BMW, AUDI, etc) but other hand witness of  de-growth in overall car sales. If auto index slip below 10300 then more de-growth can be seen in car sales.

As our mantra 'Hope for the best but prepare for the worst'. We are looking auto index very bullish if sustain over 12230 and ruthless short for below 10300. As per current and past date we maintaining our bearishness on sector until Auto index not sustaining above 12230 along with car sales number growth  for 3 consecutive quarters.
   


Mayur Jagtap

Investment Consultant.



For regular and daily small update 

Comments

Post a Comment

Popular posts from this blog

Dark Profits, Dark Propaganda: Wall Street and India-Pakistan

 Dark Profits, Dark Propaganda: Wall Street and India-Pakistan The recent India-Pakistan tensions, marked by "Operation Sindoor," are accompanied by intense propaganda and fake news from both sides. Beyond the immediate conflict, a darker side of capitalism, potentially involving Wall Street's interest in defense profits, subtly influences the narrative. While direct evidence is scarce, the economic incentives for conflict and the role of media ownership warrant consideration. Discerning real facts amidst the information war is crucial for understanding the underlying dynamics beyond the immediate security concerns. The recent surge in tensions between India and Pakistan, marked by the Indian military's "Operation Sindoor" in response to the deadly Pahalgam attack, casts a long shadow over the subcontinent. While the immediate concerns revolve around regional stability and the potential for further conflict, a deeper look reveals the insidious interplay of ...
Post a Comment
Read more

Understanding Option Trading: The Statistical and Probabilistic Game

Understanding Option Trading: The Statistical and Probabilistic Game "Trading is a game of probabilities. You don't have to be right every time. You just have to follow your rules."  In the vast arena of financial markets, option trading stands out as a unique and intriguing game—one deeply rooted in the realms of statistics and probability. Unlike traditional stock trading, where investors buy and sell shares of a company, option trading involves contracts granting the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time frame. However, what makes option trading particularly fascinating is its reliance on mathematical principles, where every move is a calculated risk based on statistical analysis and probability assessment. The Basics of Option Trading Before delving into the statistical intricacies, it's crucial to grasp the fundamentals of option trading. Options come in two primary forms: cal...
Post a Comment
Read more

The Algorithmic Threat: How Social Media Endangers Democracy

  The Algorithmic Threat: How Social Media Endangers Democracy Social media platforms have become an undeniable force in our lives. They connect us with friends and family, inform us about current events, and entertain us. However, beneath the surface of connection lurks a potential threat to democracies: the algorithms that curate our online experience. These algorithms, designed to keep us engaged, can create echo chambers and filter bubbles. They prioritize content that confirms our existing beliefs, regardless of accuracy, and push us further away from opposing viewpoints. This can lead to increased political polarization, where people become entrenched in their own ideologies and distrustful of anything that challenges them. How what's app messages impact on opinion: Echo Chambers and Confirmation Bias:   People often connect with like-minded individuals on WhatsApp. Constant exposure to reinforcing messages can strengthen existing beliefs, making voters less receptive to...
Post a Comment
Read more