thalib Engineer/Designer

Future of India's Auto Stocks

2017-05-28

Today as on date Indian IT industry was at the edge of downfall, one of such outcome of it was the mass layoff and uncertian future with change in technology. IT Industry is not in this stage over night, the signs of the IT becomeing absolute is happening over the time, but the managment of the IT firms ignored them and stayed in thier comformt zone. Over time these tech gaints lame duck.

Similar to the IT industry, Indian Auto Industry is on the line. The reason is Polution, all-electric vehicle, Tesla’s Entry into India, etc. But the biggest chanllenge is Autonomus Car, not just Indian but worlds major Auto Companies wont be in position to get to it.

We can easily compare it with Mobile phone, think of Nokia was the standard of mobile phone, but iPhone, Android changed the game. Todays Auto Gaints will meet the same fate, because its too late for them to react.

The important threat is Indian goverments plan/policy to put 6-7 million of hybrid and electric vehicles on roads by 2020 and all-electric vehicle market by 2030.

The 2020 milestone is just 3.5 years from today and 2030 is 13.5 years.

The National Electric Mobility Mission Plan 2020 is one of the most important and ambitious initiatives undertaken by the Government of India that has the potential to bring about a transformational paradigm shift in the automotive and transportation industry in the country.

  • Checkout the Mission Plan here and here

As similar to IT Industry, there are many lame ducks here too. We will come to know

As of date May 2017, Mahindra & Mahindra Limited is the only vehicle maker that entered the electric vehicle market with the acquisition of Reva Electric Car Co. Ltd in 2010.

Mahindra & Mahindra

Mahindra make electric veichles via its subsidariy Mahindra Electric. M&M sees the recent policy push as an opportunity to capitalize on its first mover advantage. Not only is the firm ramping up capacity, but it is also improving existing technology.

While the focus is on urban mass transport, Mahindra is also working on working on high end premium cars along with Pininfarina the Italian design house it acquired couple of years ago, and its Korean subsidiary Ssangyong, that can compete with Tesla Motor.

M&M will be good invesment option in long term (5-10 years). Also the companies fundametals and ratios are good.


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