As a lay investor, one way to participate in the macroeconomic revival is to invest in the sectors that will benefit most from strong GDP growth. In this regard, the transport segment- Auto Original Equipment Manufacturers (OEMs), auto components, and logistics sectors will be the most profitable for investors to profit with the rapid growth of the market economy. After being in a bearish state for the past few years, these sectors are poised to make profits over the next several years. The best way for retail investors to take advantage of this boom is by investing in transportation and logistics-themed funds through the mutual fund route.
Low penetration of cars in India
Compared to many other countries in Asia and Western economies, India ranks low in terms of the number of cars per 1000 people, with only 24 cars per 1000 people. This low figure provides wide scope for automakers to grow manifold in the coming years and decades.
Vehicle sales will increase
After a sluggish decade, the volumes of passenger vehicles and two-wheelers are expected to grow significantly. Between FY 2022 and FY 2027, volumes could double and are currently growing at a compound annual growth rate (CAGR) of 12-15 percent. The automobile sector will be further strengthened in the coming years.
Take advantage of such investors
Investing in the transportation and logistics theme is a great opportunity to make profits in the long term. Investors should have an investment time frame of at least five years. For the transport sector and car makers, issues like chip shortage and high input costs are now easing up. Presently there are few options available in this theme with the Transportation and Logistics Fund of ICICI Prudential.
Logistics: Ready to ride the e-commerce
India's strong e-commerce sector and its associated healthy prospects have given rise to a significant industry in logistics, from holding inventory to being a fulfillment center, and finally, transportation and distribution of goods. Payments apps of fintech companies have taken e-commerce to a new level today.
Further confidence in the growth of the country's automobile sector
After slowing down for the past few years till early 2021, the automobile sector is on a strong revival path. Even now it is growing rapidly. Whenever automobiles perform well, auto parts also follow the same path.
In addition, passenger cars, utility tools, motorcycles, scooters, and passenger and goods carriers also grow steadily. Various factors are at work here on such an occasion.
If you are an investment investor with a tenor of three to five years, then the transport and logistics theme is better. It is currently in the development stage. There can be a good investment opportunity in this, which should be taken advantage of.
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