Likely Behaviour of Automobile Sector in 2011

The Automobile sector grown at 25% in 2010 in India. It is one of the sector which performed well during 2010 along with Pharma and Banking sector. This year also it can grow as it grown last year.

The main strength of the sector is, it can grow when the economy is in growth path. The growth of this sector depends upon industrial growth and growing upper middle class people in India.

If the Economic growth of India continues as it is growing now in 2011 also, then we can expect the middle class to grow. If the income of this group increases, those people having two wheelers will buy cars. The recent incident of  buying of 150 luxury cars costing around 40 lakhs in Gujarat is an example of the potential of this sector.

But it also have some drawbacks. If stock market and economy in doldrums then this sector is likely to see a negative growth. Comparing to Auto companies which manufacture HMVs, LMVs, the companies which manufacture two wheelers and cars can grow in 2011.