Finder's Pick for
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Car stocks offer investors the chance to back companies with international renown. But the global performance of this industry can be inconsistent and isn’t immune to market-impacting events.
Car stocks are stocks from companies involved in the production of automotive vehicles. This investment category includes major commercial automakers, like Ford, General Motors, Toyota, heavily traded but relative newcomer Tesla, and others. It also includes companies that produce emergency vehicle equipment, signaling devices, military vehicles and specialty trucks.
There are several ways you can start investing in car stocks. You can buy shares of individual car stocks or invest in an ETF or other fund that invests in a collection of these kinds of stocks.
Here’s how to get rolling:
Many car stocks trade on US exchanges. Some of these are headquartered in the US—like Ford, General Motors and Tesla—while others are based in other countries like Ferrari (Italy), Volkswagen (Germany), BMW (Germany) and Honda (Japan).
There aren’t many Canadian-based auto manufacturers. The ones that exist aren’t very well known or cater to specific niches like coaches/buses (Prevost) or luxury sports cars (Felino). If you’re looking to invest in car stocks while supporting the Canadian economy, look for publicly-traded car manufacturers that have assembly plants in Canada such as Ford, Toyota, Honda and Volvo.
These three major automotive ETFs offer different levels of exposure to domestic and international stocks, as well as traditional, hybrid and electric automakers.
Despite inconsistent demand and the negative impact of the global pandemic, analysts have begun to speculate that the global automobile market will recover, according to a report from S&P Global.
The report projects that China will be quickest to regain its momentum, potentially resuming its positive growth trends by the end of 2022. Other countries are also expected to recover but not within the next two years.
Pandemic aside, the industry is also in the middle of a historical transition from vehicles that rely on diesel and gasoline to electric and autonomous vehicles. Electric vehicle sales have been steadily climbing since 2013, averaging a sizable 25% growth rate year over year.
This transition offers an opportunity for investors to back an emerging market trend with significant growth potential.
An investment in car stocks is potentially lucrative but far from foolproof — considering US vehicle sales have a history of inconsistent demand and the coronavirus pandemic has tipped the industry’s manufacturing on its head.
Auto demand as a result of the COVID-19 pandemic is expected to drop in North America by 3.8 million vehicles, according to Statista. China is set for a 1.8 million drop and Europe is expected to sell 4.2 million fewer vehicles than it did in 2019. All told, global automobile sales are forecasted to fall below 62 million units in 2020 — a significant dip from 2017’s global sales of 80 million vehicles.
While the COVID-19 pandemic won’t last forever, it illustrates that this industry isn’t immune to market-impacting events.
To invest in car stocks, you’ll need a brokerage account. Explore your platform options by features and fees to find the account that best meets your needs.
The COVID-19 pandemic has had a negative impact on car stocks, but forecasts for the coming years are optimistic. And as the electric and hybrid vehicle market continues to grow, so too do stock options for investing in this industry.
Before you purchase car stocks, review your trading platform options to find the account that fits your budget and trading strategy.
View our list of the top trending stocks today, and read our guide to choosing the best stocks to buy right now.
Introducing Crypto Motors, a platform that allows car and racing fans to buy, customise and build unique motor prototypes. Learn how to get a crypto car and start earning with Crypto Motors on Finder.
Find QuickVue in stock and learn what to expect with a kit that offers you two tests for more conclusive results.
Sweden-based luxury car manufacturer, Volvo, is publicly trading on the Nasdaq Stockholm AB. Find out how to buy Volvo stock in Canada.
The one, two, threes that anyone looking into cryptocurrency needs to know before you start buying.
American depositary shares provide a simple way to invest in foreign companies on US stock exchanges. But there are pros and cons to consider.
This Ark Invest ETF has piqued the interest of many market analysts. Here’s what you need to know about the Ark Space Exploration ETF.
The metaverse is here. What do you need to know before investing?
After a brief postponement, the China-based artificial intelligence company has gone public. Here’s what investors need to know about SenseTime stock.
You must be logged in to post a comment.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.