Is it time for a sector and portfolio churn away from four-wheelers to two-wheelers? Ashwin Patil answers
Ashwin Patil, Research Analyst-Auto, LKP, says while passenger vehicles had a great time, this year belongs to two-wheelers. So, there can be a good churning from passenger vehicles to two wheelers because the Q3 numbers were good for all the two-wheeler companies and surely one can definitely look at certain companies within the two-wheeler pack.
Recently, we have been hearing reports that the passenger vehicle retail registrations have been slowing down while, of course, the rural economy is picking up and things are looking on the upside for two-wheelers. Is it time now for a bit of a sector and portfolio churn away from four-wheelers into two-wheelers?
Ashwin Patil: On the back of a very low base last year, the two-wheeler industry has been performing well this year and till date, these companies are seeing about 12% to 15% growth. We believe that this industry will be definitely performing better than any other auto industries segments like passenger vehicles or commercial vehicles or tractors.
They were running out of favour last year, but this year belongs to two-wheelers. In passenger vehicles, we are seeing some sort of slowdown observed apart from the SUV segment which is doing well. The small car segment has been running into huge negatives especially for companies like Maruti and while on the other hand SUVs are running at a very good run rate, so I think apart from SUVs overall passenger vehicle industry has not been performing great.
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