/cdn.vox-cdn.com/uploads/chorus_asset/file/25784230/247333_EOY_Package_Check_In_CVirginia_STEAM_DECK.jpg?w=400&resize=400,250&ssl=1 "Steam Deck: the best games from 2024")
Why Samir Arora thinks investing in Auto industry is a ‘Ridiculous Trade’?
Source: Business Standard
Arora, during an interaction with NDTV Profit, said that “the number one most ridiculous trade in the world, not just in India, is auto.” Arora further explained, “There are these auto companies, who are IC engine car manufacturers, and the system or society or whatever—consumers or climate concerns—say now they have to make EV cars instead if they want to remain in business. So, all these companies spend billions of dollars to move to new technology, but there is no promise that the market size will go up or that their profitability will increase.”
Click here to connect with us on WhatsApp
These companies are, Arora said, spending all this money just to remain in business, which would itself be a very big capital-destroying activity. However, in addition, new competitors emerged who had no plans of being in the IC business.
“When the EV business started, they said, ‘Oh, this we can also do,’ for whatever reason. From Tesla to BYD to our Ola, all these companies, who were not there in the original industry structure, are now new players. Has anybody ever said to you that because we are all moving to EV, the market size is going up from what it was before this happened or that the profits will be higher? No. For the same industry, the number of players has increased, and everyone has to invest,” said Arora.
Arora further said that not only in Korea, but experts around the globe have been warning about declining sales in the auto industry. Thus, the investment in the auto industry, to Arora, does not seem to be a good idea.
First Published: Oct 10 2024 | 2:11 PM IST
