$ 904 Billion is the magic number if you wish to understand the worth of the automobile industry in a nut-shell. A staggering growth rate of 15 percent can be the next figure that can draw your attention towards this particular industry sector. The patterns of the demand are getting a personal touch, automobiles started their journey as mass carriers, in the second phase they became family carriers or nuclear carriers. Now we are already in the third phase where per capita density of the automobiles is increasing based on the numbers of the individuals.
As an investor you will find that you are playing a fix match taking place between the automobile companies. This industry moves in groups and they have a list of cartels that shares strong bonding with each other. Instead of competing in the same segment they try to come up with different segments where they can increase the market instead of focusing on their respective market share.
Stocks are stable unless something drastic takes place in the market, for instance right now a big sector of automobile market is gearing up for the arrival of the hybrid vehicles and electronic vehicles. Most of the new entrants in the market are looking at it as an opportunity to score. Some local players have already started a price war because out and out electrical vehicles follow a simple technology. Many experts also believe that the market for automobiles have already reached to its saturation point where no innovations can be introduced in vehicles apart from adding a simplicity and ease of functionality in them.
While making an investment in this market an investor should also have a look at the indirect competitors as well. Global recession in the price of fuel and petrol is also supporting the growth of this segment because lesser amount of the fuel clearly indicate that personal commutation will increase this increase will create a demand for more vehicles and automobile industry can get the benefit of this additional demand.