These gas-saving technological advances are extremely important in securing new clients. With many companies using diesel engines in their daily operations, a slight reduction in the fuel consumption of those engines could save those major dollars. This is important since many firms are making the switch to natural gas due to the costs for diesel.
A report released in May by Energy Vision, titled “Tomorrow’s Trucks: Leaving the Era of Oil Behind,” shows that companies operating with diesel fuel are struggling with the costs. Some of these companies are now switching to natural gas, which has recently hit historic lows. As PACCAR Inc (NASDAQ:PCAR) continues to hammer home its image of being an innovator, the firm could help prevent many of these firms from switching over.
Tata is faced with growing market but more competition
Tata Motors Limited (ADR) (NYSE:TTM) is an Indian automaker that also makes construction equipment, machine tools, and electric components for high-precision tooling. The company’s line of personal vehicles could drive growth long into the future, but I am concerned that there is too much pressure from rivals like Mahindra MHID and Ashok-Leyland. This competition is eroding Tata Motors Limited (ADR) (NYSE:TTM)’s Indian vehicle market share, taking it from 65% in 2007 to 59% in 2012.
That doesn’t necessarily mean that Tata Motors Limited (ADR) (NYSE:TTM)’s sales volume will decrease, however. The passenger vehicle market in India has grown by an average of 17% in each of the last five years, and Tata Motors Limited (ADR) (NYSE:TTM) will be able to continually capitalize on that segment. Many of the drivers in India are only barely able to afford a vehicle, and Tata Motors Limited (ADR) (NYSE:TTM) carries the world’s cheapest and smallest car, the Nano. This could result in an enormous number of sales as brand awareness improves. In fact, sales are expected to increase by over 50% over the next three years.
The India-based company could benefit from an improving domestic road infrastructure and the developing middle class in India as well. The Indian commercial vehicle market is expected to double by 2016, according to The Economic Times. I see this as evidence that more people are likely to have the capital with which to buy vehicles within the next few years. The same article points out that rapid urbanization will also help fuel the push toward driving vehicles.
Rounding out the top pick
Oshkosh Corporation (NYSE:OSK) needs to continue diversifying if it is going to be secure enough for me to consider investing in its stock. Tata Motors Limited (ADR) (NYSE:TTM) will potentially realize huge sales with its Nano as disposable income increases in India, but I see too much potential for competition that could take away those customers.
Of the three companies, I like PACCAR Inc (NASDAQ:PCAR) the best. The firm has the potential to become the standard for fuel-efficiency among diesel vehicles, and that’s a key point for many businesses that use diesel-fueled trucks.
The article One of These 3 Auto Companies Is Set for Gains originally appeared on Fool.com and is written by Phillip Woolgar.
Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Paccar. The Motley Fool owns shares of Paccar.
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