Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian auto has the edge over China - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Sep 8, 2009

    Indian auto has the edge over China

    India's auto market maybe only 19% of that of China, but the former seems to be having the edge when it comes to exports. The Indian auto industry had a tough FY09 when the economic slowdown curbed demand as a result of which sales and profits of automakers were hit hard. But the scenario seems to be limping back to normalcy. And what is more, from a longer term perspective, global auto majors are making India a hub for overseas sales of minicars as incentives lift demand for smaller, fuel-efficient autos. In fact, SIAM has reported that India's exports of minicars and hatchbacks soared 44% between January and July 2009. Further, India has not only overtaken China when it comes to exports but has also emerged as a serious challenger to Thailand and South Korea as an alternative production center in Asia.

    In stark contrast, the export performance of the other Asian automakers was not much to write about. As reported on Bloomberg, while China's auto exports plunged 60% between January and July, exports from Thailand and South Korea fell 43% and 31% respectively. Further it is estimated that small cars will account for 95% of the 690,000 passenger vehicles India will export in 2015 and that India may share the top slot with Japan as the world's biggest small car producer, building as many as 3 m units. On the domestic front, interest rates and availability of finance will continue to influence demand for autos, which has of late begun to pick up. Thus, while medium term pressures could impact the Indian auto industry, the long term prospects of the sector look intact.

    UNCTAD's take on India's GDP growth
    India's GDP growth in 2009 seems to have become a highly debatable issue. While RBI has pegged the growth for 2009 at 6% plus and CMIE at 5.8%, the United Nations Conference on Trade and Development (UNCTAD) has projected India's GDP at a much lower 5% in 2009. Having said that, on one issue it concurs with the rest in that despite the lower growth India will be the second fastest growing economy after China. The global economy, meanwhile, is set to contract by 2.7% in 2009 as tumbling profits, plunging real estate prices and rising unemployment continues to take toll. India's case had been further weakened by the drought this year as deficient monsoons till mid August wreaked havoc on crop production. But a late surge in monsoons has given a flicker of hope that the overall growth in GDP will not be tapered down. Thus, will UNCTAD's projection for this year hold true? Only time will tell.



    Equitymaster requests your view! Post a comment on "Indian auto has the edge over China". Click here!


    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    You've Heard of Timeless Books... Ever Heard of Timeless Stocks? (The 5 Minute Wrapup)

    Aug 19, 2017

    Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)