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Summary: Investing in automotive stocks can be a lucrative opportunity for all kinds of investors. These stocks represent ownership in companies that manufacture vehicles, parts, and related products. The most convenient way to buy any of the 10 biggest automotive companies is through a reliable online broker, such as our go-to option, eToro.
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What are automotive stocks?
Automotive stocks are shares of companies involved in the manufacturing, distribution, and sale of automobiles and automotive parts. These companies operate in a global market, serving consumers with a wide range of vehicles, from passenger cars to commercial trucks and everything in between.
What’s happening in the auto industry?
The automotive industry faced significant challenges in 2023, starting with a shortage of vehicles due to semiconductor supply issues and post-pandemic disruptions in the supply chain. However, by year-end, new vehicle registrations rebounded, reaching 1.9 million units, marking a notable 17.9% increase from 2022, according to The Society of Motor Manufacturers & Traders (SMMT). Towards the end of the year, a resurgence in tactical registrations hinted at reduced demand due to higher interest rates, resulting in an oversupply of vehicles.
In 2024, the new vehicle market is projected to experience marginal growth to two million units, with manufacturers ramping up production to meet demand. Despite softer demand, original equipment manufacturers (OEMs) aim to operate factories at 80-85% capacity to maximize profits. Meanwhile, the used car market continues to expand, with sales expected to reach 7.3 million units, albeit still below pre-pandemic levels.
Innovations in manufacturing processes, such as giga casting, are driving cost efficiencies and productivity improvements. Also, the launch of Tesla’s Cybertruck and advancements in battery technology are reshaping the landscape for electric vehicles. However, challenges remain, including the high cost of battery electric vehicles (BEVs), regulatory mandates for zero-emission vehicles, and uncertainties surrounding tariffs on Chinese imports.
Where to invest in automotive stocks
You have the option to invest in automotive stocks using numerous online brokerage platforms. Among these, we suggest considering eToro, a highly esteemed service boasting over 30 million registered accounts that offers a comprehensive suite of investing tools and features that could suit your needs. Some of these include:
- Commission-free stock trading;
- Access to over 2,000 stocks from 17 different exchanges;
- Charting tools;
- The option to purchase fractional shares.
Highly Rated Stock Trading & Investing Platform
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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eToro USA is registered with FINRA for securities trading.
10 biggest automotive companies
Following extensive research, we have identified the 10 biggest automotive companies based on their market cap. Each of these is deserving of your consideration if you are interested in investments in this sector. They include:
- Tesla, Inc. (NASDAQ: TSLA);
- Toyota Motor Corp (NYSE: TM);
- Porsche AG (XETR: P911.DE);
- Stellantis N.V. (NYSE: STLA);
- Mercedes-Benz Group AG (XETR: MBG.DE);
- Ferrari N.V. (NYSE: RACE);
- BYD Company Limited (HKEX: 01211.HK);
- BMW (XETR: BMW.DE);
- Volkswagen AG (XETR: VOW3.DE);
- Honda Motor Co., Ltd. (NYSE: HMC).
1. Tesla, Inc. (NASDAQ: TSLA)
Tesla, Inc. has transformed the automotive landscape with its groundbreaking electric vehicles (EVs). Led by its CEO Elon Musk, this automotive giant continues to push the boundaries of innovation in sustainable transportation, making it a dominant force in the automotive industry well worth any investor’s attention.
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2. Toyota Motor Corp (NYSE: TM)
Toyota Motor Corporation stands as one of the world’s largest automobile manufacturers. With a focus on quality, reliability, and innovation, Toyota produces a diverse range of vehicles, from fuel-efficient hybrids to rugged trucks, catering to a global customer base.
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3. Porsche AG (XETR: P911.DE)
Next up, we have Porsche AG, renowned for its iconic sports cars and luxury vehicles. As a subsidiary of the Volkswagen Group, Porsche combines performance, craftsmanship, and prestige, capturing the hearts of automotive enthusiasts worldwide.
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4. Stellantis N.V. (NYSE: STLA)
Stellantis N.V. emerged from the merger of Fiat Chrysler Automobiles and PSA Group. With a diverse portfolio of brands including Jeep, Ram, Peugeot, and Citroën, Stellantis is a major player in the global automotive market, poised for continued growth and innovation.
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5. Mercedes-Benz Group (XETR: MBG.DE)
Mercedes-Benz Group AG epitomizes luxury and refinement in the automotive industry. As a division of Daimler AG, Mercedes-Benz sets the standard for premium vehicles, blending cutting-edge technology with timeless design to captivate discerning consumers worldwide.
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6. Ferrari N.V. (NYSE: RACE)
Ferrari N.V. is synonymous with high-performance sports cars and Italian craftsmanship. With a rich heritage and a relentless pursuit of excellence on and off the racetrack, Ferrari commands a unique position in the automotive world, captivating enthusiasts with its iconic prancing horse emblem and investors with its market cap.
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7. BYD Company Limited (HKEX: 01211.HK)
BYD Company Limited is a leading Chinese manufacturer specializing in electric vehicles and batteries. With a commitment to sustainability and technological innovation, BYD is driving the shift towards cleaner transportation solutions, positioning itself as a global leader in the electric vehicle market.
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8. BMW (XETR: BMW.DE)
Bayerische Motoren Werke AG, known as BMW, is a German multinational company renowned for its luxury vehicles, motorcycles, and engines. With a focus on performance, craftsmanship, and driving pleasure, BMW continues to inspire automotive enthusiasts worldwide.
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9. Volkswagen AG (XETR: VOW3.DE)
Volkswagen AG is one of the largest automotive manufacturers globally. With a diverse portfolio of brands including Volkswagen, Audi, Porsche, and Bentley, Volkswagen AG caters to a broad spectrum of consumers, driving innovation and shaping the future of mobility.
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10. Honda Motor Co., Ltd. (NYSE: HMC)
Lastly, we have Honda Motor Co., Ltd., a Japanese multinational conglomerate known for its motorcycles, automobiles, and power equipment. With a reputation for reliability, efficiency, and innovation, Honda continues to be a trusted choice for consumers worldwide, delivering quality products and driving technological advancements in the automotive industry.
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Pros and cons of investing in the automotive industry
Pros
- Growth potential: The automotive industry is constantly evolving, with advancements in technology and changing consumer preferences driving growth opportunities;
- Diversification: Investing in automotive stocks can provide diversification to an investment portfolio, especially for investors seeking exposure to different sectors;
- Dividend income: Many automotive companies offer dividends to shareholders, providing a steady stream of income.
Cons
- Cyclical nature: The automotive industry is sensitive to economic cycles, with sales and profitability often fluctuating based on economic conditions;
- Regulatory risks: Regulatory changes, such as emission standards and safety regulations, can impact automotive companies’ operations and profitability;
- Competition: The automotive industry is highly competitive, with companies vying for market share and innovation leadership.
How to buy automotive stocks safely
Aside from conducting thorough research on the companies you’re interested in, including their financial performance, competitive positioning, and growth prospects, you should also make sure to do the following so that you buy automotive stocks safely:
- Diversify: Spread your investment across multiple automotive companies to reduce risk and enhance potential returns;
- Monitor: Stay informed about industry trends, company developments, and market conditions to make informed investment decisions;
- Consult professionals: Consider seeking advice from financial advisors or investment professionals to help navigate the complexities of investing in automotive stocks.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about the 10 biggest automotive companies
What is the largest automotive company in the world?
As of late April 2024, the biggest automotive company is Tesla, Inc., with a market capitalization of approximately $533.25 billion.
Which is the top 10 car company in the world?
According to market cap, the top 10 car companies in the world are Tesla, Toyota Motor Corporation, Porsche AG, Stellantis N.V., Mercedes-Benz Group AG, Ferrari N.V., BYD Company Limited, BMW, Volkswagen AG, and Honda Motor Co. These companies have a significant global presence and produce a wide variety of vehicles, from electric cars to traditional internal combustion engine vehicles, catering to diverse consumer preferences worldwide.
Are automotive stocks a good investment?
Like any investment, automotive stocks have their risks and rewards. It’s essential to conduct research and assess your risk tolerance before investing.
How can I buy automotive companies’ stock?
You can buy automotive stocks through online brokerage platforms, where you can trade shares of publicly listed companies. Our go-to broker is eToro.
What factors should I consider before investing in automotive stocks?
Factors such as company financials, industry trends, competitive landscape, and regulatory environment should be taken into account before investing in automotive stocks.
Highly Rated Stock Trading & Investing Platform
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
