Real estate and auto are similar - they are the two biggest outlays in a consumer budget and are critically dependent on financing. So, both of them turn down when financing becomes tough.
Real estate and auto are dissimilar in one very important way - consumers view real estate as an investment item and auto as a consumption item. When I go and buy a house, my future outlook on home prices is one of the three most important factors driving my thought process - the other two being financing and my job/wage outlook.
On the other hand, when I go and buy a car, I might try to time my car purchase to take advantage of some anticipated holiday discounts or tax reductions, but I will not bother to figure out what the price will be one year down the line. There are only two factors that drive consumer purchase decision - financing and job/wage outlook.
What all this suggests is that auto cycles are much more violent than real estate cycles. Globally, auto is in deep trouble because of flawed industry structure and mature demand. In India, where one can argue there is a lot of unmet demand, auto demand might bounce back quite sharply from depressed levels - I don't know what that depressed level is.
Prices of cars doesn't vary as much as houses or steel year on year. So, in analyzing the auto industry, one needs to focus purely on volumes and market share. In commodities and homebuilders, one has to also focus on prices one year out - which is very hard to figure out.
So, auto industry is relatively easier to analyse from supply demand perspective than the other two. What all this means is - there might be a lot of money to be made in the right Indian auto stocks by timing it right.