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Which car and truck stocks have been performing well in 2022-23?


Some major car maker shares have not done well over the past twelve months. A mixture of legacy supply problems which started during COVID coupled with the wave of interest rate raises in developed economies have truly put a dent in their share price. Tesla NASDAQ:TSLA, one of the top stocks held by private investors, has lost 26% since May 2023, General Motors NYSE:GM gave away over 9% in the same period while Volkswagen [VOW] is trading 17% lower than last year.

With cars being one of those purchases made on finance and heavily linked to going interest rates it is no wonder that car makers experienced a dent in demand in the earlier part of the current rate rise cycle. But this trend started softening at the start of the year and by March car sales had returned with a vengeance.

Car sales returning

EU-wide sales car registrations rose in March by close to 30% and in some countries like Spain have leapt even more, up by 66%. The move has been less dramatic in the US but there too March sales have risen by about 6%.

But not all car makers have had the same experience. While BMW [BMW] also went through the same dip as other manufacturers in late 2022 this changed in the fourth quarter and now the company says it expects profitable growth in 2023 with increased sales from high-revenue models and a very dynamic increase in electric vehicles. Mercedes [MBG] also posted strong results at the end of last year and is expanding its electric vehicle offering, but slightly less smoothly than BMW.

Other than the car makers there are several subsegments of companies in this space that have done exceptionally well despite, or possibly because of the rising interest rates. Car part makers’ stocks have attracted a lot of demand over the last 12 months, possibly because of the need to make existing cars last longer. Notable players here are US companies: O’Reilly Automotive NASDAQ:ORLY and Autozone NYSE:AZO.

O’Reilly Automotive, in particular, has been on the expansion path. Its first quarter sales grew almost 11%, its earnings per share were up 1% and it opened new stores, including in Puerto Rico, which reported very good quarterly results; last year the company spent $3 billion to buy back shares. In fact, O’Reilly is probably flirting with being overbought. Autozone shares are up over 40% over the last 12 months. An outlier here is also Uber, which has indirectly also benefited from higher interest rates as it comes in as a cheaper alternative to owning a car. Uber shares are up a very solid 70% on the year.

Truck maker revival

As global logistics returned with a vengeance over the last 12-18 months, interest for truck makers has also seen some revival. Shares in US truck maker Paccar NASDAQ:PCAR, for instance, have rallied over 32% over the last twelve months to trade at $71.

All of these shares can be found in a good wrapper product such as WisdomTree’s Global Automotive Innovators UCITS ETF which tracks the WisdomTree Berylls LenVal Global Automotive Innovators Index. These companies are also sifted by ESG criteria by WisdomTree to make sure they meet requirements of SFDR Article 8.

Here’s a selection of platforms where you can find the WisdomTree’s Global Automotive Innovators UCITS ETF

Product Name Exchange Ticker Listing Currency
WisdomTree Global Automotive Innovators
AJ Bell | Interactive Investor | Chrles Stanley Direct | EQi

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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