Hi Sun,
I have not watched a particular auto OEM ever.
I had some GM stock when I worked for them for 16 years and sold them upon going retail.
I'm certainly not saying there are not good stocks out there in the auto business.
In my case I had my life's savings and more invested in four dealerships.
Everything beyond that was intended to diversify out.
In general the retail auto business is going to go strong as the market has been choked down by less supply than demand for well over a year, with no clear relief in sight.
The other long term event that has occurred, mostly under the radar, is the average fleet age is now sneaking up on 13 years old and the miles on the average used car has increased strongly, as the rental (low mileage - almost new used cars) have been absent from the marketplace for almost two years.
The auto repair business will continue to be robust for a long time. There are also a shortage of repair parts both in the aftermarket and late model OEM service parts. My favorite company that sells parts is O'Reilly, mostly because they have great employees in my local market.
I will note that every time gas gets up to $4.00 a gallon, full size 4X4 trucks and full size SUV's take a big hit in value. Filling up 4 times a month (30 gallons a tank times 2.00 per gallon MORE adds an additional monthly cost of operation of $240.00. That's on top of the first 240.00 a month in gas plus a monthly payment of $1200.00 ( might be light) and insurance of $150,00 a month (might be light), and that shiny SUV mom drives to the soccer game is pushing 2,000 a month after tax money !
Demand may be strong with restricted supply now, but if this goes on longer vs. shorter, full size everything will slow down. We'll maybe see them hit the Repo auctions.
That may well open huge demand for the EV version of Trucks and SUV's for the master community/urban market (where range anxiety is eliminated by over night charging).
If I needed to keep my family budget in check, I'd buy my soccer mom wife a Toyota Prius (in high gas price markets Prius's are the next thing to gold). A nice used Prius can all but double in value.(when gas gets expensive) The era of $2.00 gas, no doubt slowed the sale and production of this very fuel efficient vehicle.
If you can buy one and want to take a risk, Buy a Bolt. The local Chevy dealer has 20 of them and he can not sell them as their is a hold on them. Lot's of people use them , just don't park your Bolt inside your garage or home. They have a bad habit of burning your house down. Chevrolet put a hold on selling them a while back, not sure of the situation now.) Used should be the deal to get. Eventually a fix for free will be campaigned to all buyers.
Chevrolet makes very few cars now (spark and malibu) some muscle cars Camaro and Corvette). Ford makes the mustang. Chrysler makes some hotrods Charger Challenger.
Cheap small cars with internal combustion engines have been jettisoned years ago as "No demand" cars when gas was cheap.
Component makers for EV's (if their parts are found across all brands) will be pushed to ramp volume - my guess would be in smaller drive trains chasing efficiency. huge void for low cost EV's.
No plan, just ramblings sorry.
On the component making aspect I have a long and large position in Cohu. Cohu is the only global test handler maker. Their acquisition of Excerra in October of 2020 is just now building better earnings. All the way though the rightsizing of the last 2 years,the auto business has beeen their strongest sector.
All of the electronic safety items that go on all EV's AND ICE autos go through a 100% test. So abs brakes systems, power modules for air bags, and now lidar radae and ADAS systems are creating a much bigger footprint for electrical testing. Electrical testing which must be done in both a cold and a hot temperature range environment. A skill Cohu has invented ever since micrprocessor originally need to be test in a hot environment and that morphed into a need to cool them a test requirement created a ver "HOT" environment.
Every auto sensor and chip which is in short supply, must go through a Cohu test handler. Cohu has rolled up the number one market share of all types of handlers made in the World : gravity, pick and place, turret, and wafer chip scale (mobile phones) is growing fast.
After their acquisition of Xcerra, they have a 25% cagr with mid 40% margins and 20-22 net income, and effectivel NO DEBT!
That's my best back end investment in the auto revolution. Hopefully my best recommendation to you. <smile>
Bob |
