© Reuters. 3 No-Brainer Auto Manufacturing Stocks to Buy Now
Even as a global semiconductor chip shortage is presenting a severe challenge to the auto manufacturing industry, auto sales and production are bouncing back as the public health crisis abates. So, we think Investors that are looking to benefit from the industry’s solid growth prospects could invest in Daimler (OTC:), Suzuki Motor (SZKMY), and Isuzu Motors (ISUZY). These stocks possess a solid combination of fundamental qualities. Read on.
Although the COVID-19 pandemic hit the auto manufacturing industry just as badly as to several other industries in the first half of 2020, automakers worldwide have seen a rapid surge in production since the third quarter. People have flocked to dealerships as public health distancing restrictions have been loosened in most areas.
Meanwhile, a global semiconductor chip shortage has made consumer vehicles pricier, thanks to rising demand. However, the auto industry is well-positioned to grow with the gradual resolution of the chip shortage. Chipmakers have pledged more than $700 billion to expand production capacities over the next decade. And the automotive industry is expected to grow at a 4.5% CAGR between 2021 – 2028.
Given this backdrop, we think auto manufacturing stocks of Daimler AG (DE:) (DDAIF), Suzuki Motor Corporation (SZKMY), and Isuzu Motors Limited (ISUZY) could be no-brainer bets because of their solid fundamentals and growth prospects. These stocks are rated ‘Strong Buy’ in our proprietary rating system.
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