By Patrick Foot, financial markets writer at IG. Find out how CFD trading works with IG.
Despite the rise of new technologies and green awareness, the motor industry is still a massive player in worldwide markets. It’s a sector fuelled by passion, with motoring brands and models receiving adoration rarely seen for companies like Google or Microsoft.
If you’re a petrolhead, though, life can be hard: cars are expensive to run and tend to drop in value fast. But can you offset your losses by turning you knowledge of motoring into some wise investment choices? The majority of major manufacturers list on stock markets both home and abroad, so there’s plenty of options out there…
Big players
All the manufacturers of America’s top selling cars last year have a listing on the stock market, though some are less direct than others. Both Chevrolet and GMC are owned by General Motors and Chrysler (maker of the Dodge pickup) is owned by Fiat.
In 2013, Ford produced the most popular model, the F-Series pickup (topping the charts for a 32nd consecutive year). The venerable motoring brand’s success in both the US and abroad has seen their share price perform handsomely over the past couple of years, almost doubling in worth.
Another American titan, General Motors, has had a similarly strong two years, growing slightly less than Ford at 91%. It is worth noting, though, that General Motors has so far had a rocky 2014, dropping in value considerably in the spring before picking up in the summer so far. It’s earnings season in the US at the moment, so General Motors will hope to push up the markets off of the back of some strong results. It will hope that the strong sales of the Chevrolet Silverado will help it achieve just that.
The next two best sellers are from Japanese manufacturers Toyota and Honda. Both companies have been busy proving that the recent turnaround in the motor industry isn’t just limited to American companies. Like General Motors, both Toyota and Honda have slowed a little this year, but are still trading significantly higher than two years ago. For Honda, that’s a respectable 33% uplift; for Toyota it’s an impressive 88%.
Specialist brands
So the story for the big names in motor manufacturing is an impressive return to an industry many thought was in for tough times. But for true car aficionados an affordable, useful vehicle is never really enough – so what options are there for sports and luxury vehicle investment?
Those who enjoy the precision of German engineering can show their support with an investment in BMW, Daimler (owner of Mercedes Benz, amongst other makers) or Porsche. BMW, who trade under German moniker Bayerische Motoren Worke announced record sales for the first half of this year. They have had no dip to recover from on the markets, and except for a stall in 2011, have been steadily on the rise since the crash in 2008.
Daimler and Porsche are closer to their American and Japanese counterparts, with a rise beginning midway through 2012. Both have increased almost 90% in the past two years.
Those who prefer Italian cars have less to choose from, as Fiat own most of the major brands including Ferrari, Masserati and Alfa Romeo. The other notable car company, Lamborghini, are privately owned and as such not listed on the stock market. Fiat’s performance in the past two years, though, has outstripped many other companies on bigger exchanges. The company has grown 110% and shown promise ahead of their new listing as Fiat Chrysler on the New York Stock Exchange in a few months.
A green opportunity?
For those who prefer to enjoy their car without worrying about any negative environmental impact, plenty of electric options are available on the market now. And it’s a technology that is anticipated to take off in a big way in the future. Most of the companies mentioned above have some kind of electric model either on or hitting the market, but the two biggest players are probably Renault-Nissan and Tesla.
Tesla has shocked the market with its staggering rise in the past two years, shooting up a meteoric 550% in value. Those who got on board with Tesla in 2012 will now be seeing some amazing returns on their investment.
Across the board, motor enthusiasts have seen their industry pull of a successful period on the markets recently. If you think that may be set to continue, then take a look at your favourite car makers as they might be worth an investment. If you can predict the next Tesla, though, there’s some real money to be made.
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