Auto and auto components
Business model
The auto sector has two layers:
OEMs (Original Equipment Manufacturers) - companies that assemble and sell vehicles (cars, two-wheelers, trucks, tractors). Revenue = units sold × average selling price. Mix matters: a premium SUV makes more profit than an entry-level hatch.
Auto components / ancillaries - companies that supply parts to OEMs (engines, gearboxes, electricals, body panels, seating). Revenue depends on their content per vehicle, OEM volumes, and after-market sales.
Both layers are cyclical - demand swings with macro, fuel prices, financing availability, and regulatory cycles (BS6, EV transition).
Key metrics
For OEMs:
- Unit volumes by category - monthly data available
- Average selling price (ASP) - direction of mix
- Realisation per vehicle - captures both volume and mix
- Domestic vs exports
- Capacity utilisation - operating leverage signal
- Marketing spend per vehicle - competition intensity