Buy Ford & GM, despite UAW Strike? Read & decide.
According to the European Automobile Manufacturers’ Association, over 85 Million motor vehicles were built around the world in 2022, based off data from the World Trade Organization (WTO)..
In below diagrams, text was added to make sense of the 85 million vehicles, by ranking the world’s 10 largest automotive exporters.
It includes countries from nearly every corner of the world, highlighting the global nature of the industry.
Before looking at the charts, below are the Criteria & Conditions used in the selection & ranking process.
Criteria & Conditions:
Above data represents a country’s share of the total export value of global automotive products.
“Automotive products” — defined by WTO includes [1] motor vehicles, [2] parts and accessories for motor vehicles, and [3] internal combustion engines (ICE) for propelling said vehicles.
“Automotive products” excludes motorcycles & trailers.
Two distinct years’ data were compiled for comparison - Year 2000 &Year 2022.
Top 4 automotives exporter
Top 5 to 10 automotives exporters
Data Analysis & My views:
Were you as surprised to find that despite the covid pandemic (started in 2020, peaked in 2021, new normal in 2022), there was “actual” growth in the auto industry.
Were you surprised to learn that Thailand made it to the Top 10 list? I was.
From above diagrams, conclusions could be drawn as to which countries have experienced the most growth or decline over the past 22 years.
Top 3 Growth:
Automotive exporters that grew their share of global value the most since 2000 are: [1] China (+7.70%), [2] Mexico (+3.20%), and [3] South Korea (+2.50%).
China is home to some of the world’s biggest automotive suppliers.
This includes [1] WeiChai Power for diesel engines, Huayu Automotive Systems Company Limited for drivetrain and air conditioning systems, and [3] $Contemporary Amperex Technology Co.,Ltd.(300750)$ aka CATL - EV batteries manufacturing specialists.
Mexico’s growth strategy works by attracting global brands to build their factories there.
Mexico’s competitive edge includes [a] cheaper labor and [b] land border to the United States.
With the current UAW labour strike that is crippling the US auto industry, it will not be a surprise that the Big 3 will make a beeline for Mexico once the strike settlement is completed.
The Management will not be subjected to strikes, threats and coercion in the future.
South Korea, whose growth is largely attributed to $Hyundai Motor Co., Ltd.(HYMTF)$.
This enabled the Seoul-based automaker to become the third largest on a global basis.
Top Declines:
Automotive exporters that have their share of global value shrunk the most since 2000 are: [1] Canada (-7.20%), [2] Japan (-6.40%), and [3] US (-2.60%).
According to Driving.ca, the decline was not due to falling demand but severe production constraints.
Should Canada decide to capitalize on new EV-related investments, this could be the game-changer going into the “future”.
In March 2022, Stellantis NV and LG Energy Solutions announced the construction of a $3.5 Billion EV battery plant in Windsor, Ontario.
Construction will commence in 2024 and production is expected to commence in 2025.
Will this coincide with Canada’s drive for EV adoption?
How I interpret the above “country ranking” information.
It is a “known” fact that retail investors do not like to invest in foreign companies listed on the US market; regardless how solid a foundation and how soundly run the company is.
Case in point — some of the Chinese companies listed on US stock exchanges that have been largely “ignored” by investors. $BYD Co., Ltd.(BYDDF)$ is a classic example. It is not getting the attention it deserves largely due to the geopolitical tension between US and China.
Focusing on car makers that helps US to No #2 position, the Top 5 are:
Based on the American-Made Index ranking by vehicle, the Top 5 US automotive products makers have been tabulated (see above).
Strangely enough, the Big 3 ( $Ford(F)$ , $General Motors(GM)$ , Stellantis NV), embroiled in the current UAW strike could be found in above ranking.
There’s still a lot to be said about these “established” car makers.
Don’t write them off yet!
If a similar report is re-produce at 2023-year end, I am very certain that a totally different picture, will emerge — in terms of sales volume and value. Agree?
Do you think you will invest in either of the Big 3 if the price is right?
Do you think the Top 3 exporters will be able to hold onto their output (hence ranking)?
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
All the motor company stocks are having a hard time now….
GM latest and greatest offer. GM said the new offer includes a 23% general wage increases representing a 25% compounded wage increase over the life of the agreement, with 10% increase in the first year.
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$Ford(F)$ HOLD or SELL 🔥
Mntp