Between Donald Trump and Elon Musk, car stocks have rarely been far from the news this year. In March, Trump announced 25% tariffs on cars made outside the US, to kick in from April. South Korea and Japan are respectively the second- and third-biggest suppliers of cars to the US market (after Mexico), with Germany coming in fifth. So not surprisingly, stocks including Toyota, Honda, Nissan, Mazda, Subaru, Mitsubishi and BMW all dipped. Trump has previously called out the EU specifically on the matter: ‘They don’t take our cars, they don’t take our farm products, they take almost nothing and we take everything from them. Millions of cars, tremendous amounts of food and farm products.’
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. Here’s how you can get involved.
Some of the stocks listed above are parent corporations with a few brands in their fold.
Chevrolet
Buick
GMC
Cadillac
Abarth
Alfa Romeo
Chrysler
Dodge
Fiat
Jeep
Lancia
Maserati
Ram Trucks
Jaguar
Land Rover
Daihatsu
Hino
Lexus
Toyota
Audi
Bentley
Cupra
Jetta
Lamborghini
Porsche (can be traded directly)
SEAT
Škoda
Volkswagen
How to invest in car stocks
Open a sharing-dealing account. The first step before investing in car stocks is to open a share trading account. Choose a platform that suits your needs, whether it’s one with in-depth research tools, low fees or a simple interface. Our picks are below.
Fund your account. Once your account is set up, deposit funds. You can do that via a bank transfer, debit card or any other means allowed by your platform.
Research and choose car stocks. Research the best car stocks for your portfolio, and then search for them by company name or ticker symbol.
Place your trade!. Once you’ve found the car stock, select the amount you want to invest and create an order to buy shares. And just like that, you’re now officially an investor in the car industry. *Blinks back tears* …they grow up so fast!
Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease.
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UK car stocks
Most carmakers have relatively thin profit margins, but have been considered a reliable investment for decades. Car and auto stocks are considered to be cyclical stocks, which means they generally rise and fall as consumer confidence changes.
When the economy is doing well, people are more likely to buy new vehicles, which can have a positive impact on auto share prices. When the economy is doing poorly, people are unlikely to buy new cars, and auto stocks may suffer as a result.
The rise of electric and hybrid vehicles has also had a huge impact on car stocks, with companies like Tesla (TSLA) reaching huge valuations due to investor confidence in the future of electric cars. Most of the world’s largest car manufacturers now produce electric vehicles, and this is likely to have a significant impact on the price of car stocks in future.
The UK has a proud automotive tradition, and there are a number of popular UK car stocks that are listed on the London Stock Exchange, including:
Aston Martin Lagonda
Auto Trader Group
Rolls-Royce Holdings
Why invest in car stocks?
The industry is in the middle of a period of flux, transitioning from vehicles that rely on petrochemicals and humans to electric and potentially autonomous vehicles. Who knows… hydrogen fuel-cell vehicles could change everything! Electric vehicle sales have been steadily climbing since 2013, averaging a sizeable 25% growth rate year over year.
Some brands are proving better at adapting than others, and new players are entering the fray as the tech evolves. So it’s realistic to expect that we’re going to see winners and losers, and that means the opportunity for canny investors to speculate.
Bottom line
We’re likely to depend on cars for the foreseeable future, but they’re changing fast. As well as pioneering and/or resilient manufacturers, speculators are finding opportunities for equity growth in linked “nuts and bolts” stocks, like battery or chip makers. As the landscape changes, we may see the survival of the fastest-to-adapt.
As ever, a diverse portfolio is usually safest, and putting all your money into car stocks could be a risky game.
Finder poll: Out of the following car brands, which is your favourite?
Why these brands? We took the 8 largest publicly-traded car stocks by market cap at the start of 2024, where the stock is a brand rather than an unheard-of parent corporation. We excluded Ferrari beacuse, well, it's Ferrari.
Steps to add Tesla stock to your portfolio, with historical pricing, volatility and earnings metrics.
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