One must invest in auto stocks. With growing economy and pathetic public transport every one likes to own one's own transport. A cyclist wants to upgrade to motor cycle, a two wheeler to four wheeler, a four wheeler from a lower segment to higher segment car. Further, for status symbol one likes to have more numbers of private transport. With higher insurance charges, and changed terms of loosing entire 'No claim bonus' on preferring claim, one likes to have two cars, one small car for daily use and the second for long trips/for parties.
Agri based econonmy will see growth of tractors.
Poor railway system and beeter roads would see growth of trucks and buses.
With steel prices stabilising and with growing sales the bottom line will show growth.
Thus auto industry has great future. Only short term players like day traders are responsible for low PE multiples.
My preferences:
Maruti / Tata Motors at No. 1. Hero Honda Bajaj Auto M & M Punjab Tractors
