Auto Trader and Autohome: top picks in a gloomy car industry
British-based Auto Trader and Nasdaq-listed Chinese group Autohome dominate their respective geographies for online car sales. True, the automotive industry hasn’t been a particularly enjoyable environment in 2019, but both companies are defying the trends. Can their growth continue? We think so. Dealers aren’t likely to abandon their biggest single source of custom in a challenging retail environment.
The apparent end to the current economic cycle is having a particularly tough impact on car makers. In January, the Society of Motor Manufacturers and Traders said 2.36m new cars were registered in the UK in 2018, down 6.8% on the previous year, marking the biggest drop since an 11% fall in 2008. Global figures were just as depressing: passenger car sales fell 4.1% in 2018 largely owing to the first decline in China for several decades.
Car manufacturers are feeling the pressure of this decline. After a raft of bad numbers, many companies are attempting to mitigate the problems by cutting costs. Nissan, Honda, Mini and Ford are all set to close British factories in the coming months, while Fiat Chrysler and Renault are attempting to join forces. It hasn’t been an easy few months for car retailers either. A quick glance at the share price performance of the leading UK motor retailers Inchcape (LON: INCH), Pendragon (LON: PDG)…
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