People need cars to move around. That’s why it’s no wonder that data says there are 1.4 billion cars on the road, and that figure is only expected to increase in the coming years. Moreover, those who don’t own their own cars ride public utility vehicles for daily commute to work and other errands. For this reason, car warranty companies suggest protecting your vehicle investment with extended warranties that cover mechanical issues and performance problems. After all, cars will deteriorate over time due to wear and tear.
Clearly, based on the statistics noted above, the automobile industry is already a massive force to reckon with. Since the inception of the first Model T Ford, the automotive sector has ballooned, with no signs of stopping. Although vehicle production has slowed down due to pandemic lockdowns, quarantines, and general global economic downturns, it will never cease altogether. Today, both production and demand are slowly recovering. With the majority of the people in the world now vaccinated, economies are slowly opening up, with the clamor for reliable and safe transport on the rise.
In fact, because of the pandemic, people have come to realize how important it is to stay inside a private car to mitigate exposure to viruses. Thus, it’s no surprise that people, even those with limited budgets, prioritize owning a vehicle in their monthly budgets. Studies show that the auto industry will be worth around $8.9 trillion by 2030. That indicates enormous economic opportunities to be made in this industry. Learn more about what you can do to increase your wealth by investing in the automotive industry.
Automotive Industry Overview
The global automotive industry is massive, producing a lot of money for car manufacturers and other industry key players. Apart from the car automakers themselves, there is a broad range of companies needed in car production, such as:
- Car components and auto parts
- Tech startup suppliers
- Insurance providers
- Other service companies
Although production and sales may have dropped due to the global coronavirus pandemic, this health crisis can never make the auto industry tank or disappear. In the modern world, automobiles are considered a necessity in everyday life. Every individual will always have transportation needs.
From First World countries to developing ones, people and products need to be moved or transferred from one place to another. And even if some sectors of the economy are facing economic issues, with some hesitating to make a new vehicle purchase, this scenario will not persist. Since time immemorial, people have been dynamic and needed to move.
Worthwhile Auto Industry Investments
As an investor, you may feel ambivalent about investing in this industry given the global economic downturn. However, this should not be the case, especially if you’re envisioning a long-term investment for the future. To help you out, consider the following:
Big Brand Players
It’s a fact that some car brands are better and more popular than others. You should look out for them because they’ve performed well historically. Popular stocks are Tesla, Ferrari NV, Ford Motor Company, Volkswagen, and Chrysler.
Look at Suppliers
Behind every successful car brand is a whole gamut of suppliers that make production possible. For every model, dozens of other companies are usually involved in producing auto parts, such as doors, brake pads, coils, and even tech software. In fact, the suppliers are also important pillars that help in making the automotive industry thrive.
Electric and Hybrid Cars
Various governments have imposed regulations to reduce carbon emissions due to global warming and climate change. That’s why electric vehicles and hybrids have increased in popularity these days. Thus, it’s vital to explore opportunities in these areas since they’re growing. Electric cars and hybrids are not only trendy but profitable. They can also help mitigate air pollution, so these revolutionary inventions are set to make waves in the next decade. If you invest now, you stand to gain more in the future. Now, it’s not just Tesla offering these vehicles. You’ve got classic brands like GM or General Motors, Toyota, and Volkswagen investing in this tech.
Transportation services like Grab, Lyft, and Uber have had tremendous popularity over the years, especially in urban areas where parking is a problem. The service addresses the carbon footprint because individuals could reduce emissions by sharing rides. These industries are undoubtedly worth researching and investing in, especially since they’re gaining momentum and popularity with consumers.
Always Invest Your Money With Caution
As an investor, you must do your due diligence and research before investing your hard-earned money. Like any industry, potential investors must carefully study the automotive sector. A good rule of thumb is not to invest in what you don’t know and only invest money you can afford to lose.
From an investment standpoint, those who study their options mitigate risk and stand to gain more profits. With enough analytical skills and foresight, you can determine which aspects of the automotive industry are worthy of your attention.