FINANCE - OPPORTUNITIES IN AUTOMOTIVE STOCK MARKET

Is the Automotive Stock Market in Crisis?

EUROPE & US

As of September 2024, the automotive stock market is facing significant challenges, but it's not necessarily in a full-blown crisis. However, several factors are contributing to a challenging environment:

1. Rising Interest Rates: Higher interest rates make financing car purchases more expensive, which can reduce consumer demand.   

2. Supply Chain Issues: Ongoing supply chain disruptions, especially related to semiconductor shortages, have constrained production and increased costs for automakers.   

3. Economic Uncertainty: Global economic uncertainties, such as inflation and recession fears, can lead to a decline in consumer confidence and spending.  It is well shown in the next table, where the quantity of vehicles through every month, up to august 24, is registered. 

1. 
   

2. Shift to Electric Vehicles: The transition to electric vehicles is disrupting traditional automotive business models, requiring significant investments and potentially impacting profitability.   

3. Competition from Tech Companies: Tech giants like Tesla are entering the automotive market, increasing competition and potentially disrupting established players.   

While these factors pose challenges, the automotive industry is not entirely in crisis. Many automakers are adapting to these changes by:

• Investing in electric vehicle technology

• Improving supply chain resilience

• Exploring new business models

• Focusing on premium or niche segments

CHINA

Many Chinese automotive companies have seen a decline in their stock prices in recent times. This is largely due to a combination of factors:

1. Increased Competition: The Chinese automotive market is highly competitive, with numerous domestic and international players vying for market share. This can put pressure on pricing and profitability.

2. Economic Slowdown: China's economy has been experiencing some slowdown, which can affect consumer spending on automobiles.

3. Regulatory Changes: The Chinese government has implemented various regulations and policies related to the automotive industry, which can impact the business environment for automakers.

4. Geopolitical Tensions: Ongoing geopolitical tensions between China and other countries can create uncertainty and affect investment sentiment. just give a look to the increased customs duties in USA EU and CANADA, against the Chinese imported vehicles.

• NIO is an example of falling Chinese automotive stock.

• GEELY and LI AUTO also are reducing thier stock price.

OPPORTUNITIES: automotive sector is facing changes and challenges that are difficult to manage. Long times are required for the industry to adapt itself to a changing world. actual level of prices sign that we are in the middle of a big turn around. many companies reached historical price support levels (if not considering COVID 202 minimum) on their graphs:

• BMW.

• Stellantis.

• Ford.

• VolksWagen.

  
  

for each of them will be execute a short analysis of the most important parameters to consider and to try to detect a minimum price target to buy.

DISCLAIMER:

I am not a financial advisor. The information provided is for informational purposes only and does not constitute investment advice. I recommend that you consult a financial professional before making any investment decisions.