Summary: The luxury car market is a niche but rather profitable sector built around brand exclusivity. As such, it enjoys global recognition and attracts a large number of investors. In this guide, we’re taking a look at the top 3 luxury car stocks to buy in 2024 based on solid financial performance and a promising outlook for the future. To start investing in luxury car stocks, investors can open an account at an online stock trading platform such as eToro.
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What are luxury car stocks?
Luxury car stocks
The luxury car sector enjoys a prominent presence worldwide. Since nearly everyone is familiar with brands such as Bugatti and Lamborghini, these stocks consistently attract investor attention. Indeed, the market is rapidly growing with a compound annual growth rate of 8 to 14 percent through 2031, and the expansion might result in excellent investment opportunities in leading luxury car brands.
3 Luxury Car Stocks to Buy in 2024
The automotive industry as a whole is evolving, and the push for new cutting-edge technologies, such as electric vehicles (EV), has positioned the luxury car sector in the perfect spot to provide significant growth potential in the coming years.
The top 5 luxury car stocks to consider in 2024 are:
- Volkswagen Group (FWB: VOW);
- General Motors (NYSE: GM);
- Ferrari (NYSE: RACE).
Note
Volkswagen Group
The Volkswagen Group is a leading automaker with a strong portfolio of luxury car brands, including Audi, Porsche, and Bentley. Volkswagen has also invested heavily in developing EV products to stay ahead in the market. With a market capitalization of around $56 billion and consistently growing revenue, this is a luxury car stock you should consider for your investment portfolio in 2023.
Volkswagen stock price today
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2. General Motors
General Motors (GM) is another leading group in the luxury car market, boasting an impressive lineup of luxury brands such as Cadillac. With a market capitalization of around $39 billion, a history of paying dividends, and $27 billion invested in electric and autonomous vehicles, GM is a stock worth keeping an eye on.
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3. Ferrari
No list of luxury car stocks would be complete without mentioning Ferrari. As probably the most famous luxury and high-performance car manufacturer, the brand has a dedicated following of wealthy customers and enthusiasts, making it a top contender in the market. With a market capitalization of around $64 billion, increasing revenue, and an esteemed reputation, Ferrari is worth checking out.
Ferrari stock price today
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Where to buy luxury car stocks?
Our go-to brokerage for luxury car stocks is eToro, a fully licensed trading platform with more than 30 active users and a range of useful trading features, including:
- Commission-free stock trading;
- Access to over 2,000 stocks from 17 different exchanges;
- The option to purchase fractional shares;
- A user-friendly platform that simplifies the trading experience.
Highly Rated Stock Trading & Investing Platform
-
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.
-
Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
What to consider when buying luxury car stocks
When considering luxury car stocks, it’s essential to keep in mind various factors that can impact their performance. For instance, the increasing shift towards electric vehicles (EVs) creates new opportunities in the market, and companies like Tesla and Toyota are shifting their focus to introduce premium electric vehicles in their line-ups.
Note
Some other factors to consider include:
- Market conditions and macroeconomic indicators can also affect the performance of luxury car stocks. After all, recessions or economic downturns can lead to reduced demand and make consumers spend less on high-end products like luxury vehicles. In addition, keep an eye on interest rates and other economic indicators as they can influence the overall demand for luxury cars and their stocks;
- Technological advancements are another critical factor. Companies that invest in autonomous driving features, connected services, and advanced safety systems are often better positioned to compete in the modern auto market. Such innovations can increase a company’s competitiveness and profitability over time;
- Operating margins, income, and overall profitability: These factors can help gauge the company’s ability to handle market pullbacks and recessions. That is, companies with strong consumer products and retail offerings might fare better during economic downturns.
Risks and challenges involved with buying luxury car stocks
When investing in luxury car stocks, you have to be aware of the potential risks and challenges involved with such an investment. Some of them include:
- The failure to adapt: One of the primary concerns is the shift towards electric vehicles. The automotive industry is embracing electrification, and companies that fail to adapt might struggle to compete;
- Economic problems: Luxury car stocks can be vulnerable to economic fluctuations. As discretionary goods, luxury cars get hit hard during a recession. Moreover, try to keep an eye on potential changes in interest rates, as they could negatively impact consumer financing for high-priced vehicles;
- Tech issues: Problems like chip shortages impact the entire automotive industry. Shortages lead to production delays and hamper carmakers’ ability to deliver new features such as autonomous driving;
- Company management: Lastly, consider the company’s management before investing. Factors such as a solid track record, visionary leadership, and the ability to innovate under pressure are vital to success in a sector known for cyclicality.
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 3 luxury car stocks to buy in 2024
What are the top 3 luxury car stocks to buy in 2024?
The top 3 luxury car stocks to buy in 2024 include Volkswagen Group (FWB: VOW), General Motors (NYSE: GM), and Ferrari (NYSE: RACE).
Are luxury car stocks a good investment option?
Luxury car stocks can be a solid investment option due to the appeal of luxury brands and the potential for sustained demand in a niche market. However, as with any investment, it is paramount for investors to conduct thorough research before making any investment decisions.
How do I buy luxury car stocks?
You can buy luxury car stocks through online stock brokerages such as eToro.
Highly Rated Stock Trading & Investing Platform
-
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.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
