Auto Industry Trends and Day Trader Impact
Oil prices have in recent years been pressuring auto manufacturers to develop high-mileage fuel-efficient models that reduce both emissions and the cost of operation to vehicle owners. Many companies have developed hybrid models that operate on a combination of electric and gasoline power, and have also developed automobiles that run on pure electric power.
Then oil prices dropped through the floor due to alternate production methods such as fracking and other resources that increased supply and drove down consumer prices at the pump. This eased the financial burden of operating their vehicles and reawakened consumer interest in less fuel-efficient vehicles such as SUVs and luxury automobiles.
Globally the automotive market is expected to continue moderate growth in the future, although consumer demand for advanced technology in their vehicles will drive the innovation manufacturers bring to market. Already technology leaders such as Apple and Google are participating in computer-driven vehicles that allow commuters to take advantage of their time to read, plan, and collaborate with other riders rather than focusing on the demands of driving.
Although analysts differ in their predictions on when and by how much oil prices will begin to escalate back their past “normal” prices, investment in electric vehicles is continuing at a rapid pace with Tesla (TSLA) soon to bring a lower-priced automobile to market that is targeted for mass appeal. Interest has been so keen on this model that consumers have waited in line to put down a $1,000 deposit to be able to purchase the automobile when the expected delivery date approaches late next year. With the success of Tesla’s luxury Model S and anticipation of the new Model 3 Tesla’s stock has jumped 8% with a 12-month upward trend of nearly 25%.
Not to be left in the dust by Tesla’s developments GM has also announced the Bolt electric vehicle which will be introduced on a small crossover platform with a driving range and price point very similar to the Tesla Model 3.
Global rise of the middle class, especially in developing countries will make vehicle ownership open to new markets such as Chinese consumers. Part of the challenge for manufacturers and dealerships will be how to approach the newer generations of shoppers. Technology and software capabilities will be advancements that draw interest to specific manufacturers and models.
What is the Day Trader Impact?
Focusing on features and technology integrated into vehicle designs means that traders should monitor industry announcements of partnerships with software companies developing the integration between man and machine. This is where the future of automotive marketing is heading, making it an attractive opportunity to share in those developments.
Low oil prices mean vehicles such as SUVs and pickups will remain popular with consumers making investments in leaders in those categories viable, at least in the short term.
Still, technology and partnerships with companies leading the way toward software-enabled vehicles remains a leading opportunity for day traders to select winning investments.
Investing in Auto Industry Trends
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