My hypothesis -
a) Given the number of new cars being sold (Maruti Alto alone sells 33000 cars a month) and
b) Given the uptake in the Used Car market I see around me (and in general, across IT companies and Tier I cities (just check Sulekha.com for the number of ads of used cars for a pointer))
I feel that the Auto Ancillary market in India is just taking off.
I have no particular idea on which stock to invest in, but on a macro basis, the hypothesis feels right (feel free to squash this idea).
At a very high level, the auto ancillary market is divided into
a) Engine Parts
b) Electrical Parts
c) Drive and Transmission steering parts
d) Suspension and Braking parts
e) Other equipment parts.
The major companies in this market as of today are -
Exide Industries and
Amara Raja batteries.
A query to the group is - Given the potential in the foreseeable future for Auto Ancillary parts, which of these companies (or other companies that I might have missed) are well positioned to take advantage of the demand? Which of these companies have a good track record? Is there any value buy at these levels?