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Henry Kallstrom

Disclosure: I am in full compliance with all ethics and other policies for Market Realist research analysts. I am not invested in securities that I cover on Market Realist.

More From Henry Kallstrom

  • uploads///Valuation
    Consumer

    Must-know: Top auto industry ETFs for investors

    The First Trust NASDAQ Global Auto ETF (CARZ) is the most traded auto-focused ETF. The three-year return for the ETF is 48.32%. YTD, CARZ provided a return of 2.23%.

    By Henry Kallstrom
  • uploads///Motor Vehicle Production
    Consumer

    What makes the auto industry highly concentrated?

    The automobile industry is one of the most highly concentrated industries in the world. The market continues to be dominated by a few major companies.

    By Henry Kallstrom
  • uploads///Supplier power
    Consumer

    Suppliers’ power is increasing in the automobile industry

    Auto suppliers’ contribution increased from 56% in 1985 to about 82% now. Automakers are becoming more like assemblers and less like manufacturers.

    By Henry Kallstrom
  • uploads///Debt in capital structure
    Consumer

    Ford, Daimler, and BMW employ high financial leverage

    Ford (F) uses a high amount of financial leverage. Its debt-to-capital ratio is 81.1%. This is significantly above the industry average of 53.1%.

    By Henry Kallstrom
  • uploads///EBITDA Margin
    Consumer

    Intense competition leads to low profit margins for automakers

    The auto industry has lower margins primarily because of intense competition. It makes it difficult for companies to pass on increases in raw material prices to the customer.

    By Henry Kallstrom
  • uploads///Region wise sales growth
    Company & Industry Overviews

    Why growth shifted in the global automotive industry

    The automotive industry is geographically concentrated. The top 15 countries produce 88% of the world’s vehicles. Almost all of the G20 nations have a manufacturing unit.

    By Henry Kallstrom
  • uploads///Correlation Vehicle expenditure and Business Index
    Company & Industry Overviews

    Gasoline prices affect automobile purchases

    As of December, gasoline prices fell by 34.4%—compared to last year. Used car purchases increased by 19.4%. Expenditure on new motor vehicles also increased.

    By Henry Kallstrom
  • uploads///Vehicle sales in  largest economies
    Company & Industry Overviews

    Why GDP and automotive industry growth are related

    There’s a direct correlation between the size of a country’s GDP and its automotive industry. The auto industry has been expanding at a fast pace over the past several years.

    By Henry Kallstrom
  • uploads///Auto Loan Growth
    Company & Industry Overviews

    Declining interest rates lead to more auto loans

    As of 2Q14, the total outstanding auto loan amount in the US hit an all-time high of $905 billion. It grew at a CAGR of 6.2%—from $711 billion in 2010.

    By Henry Kallstrom
  • uploads///Lease Penetration
    Company & Industry Overviews

    Vehicle leasing is driven by life cycles and innovation

    There are higher maintenance and repair costs as a car gets older. This supports the option of leasing a vehicle.

    By Henry Kallstrom
  • uploads///TCI
    Company & Industry Overviews

    Automakers use incentives to entice customers

    Typically, automakers provide incentives in a slow market. They offer incentives for low-selling models. The total number of vehicles sold in the US in 2014 was 16.5 million.

    By Henry Kallstrom
  • uploads///Capacity Utilization
    Company & Industry Overviews

    High operating leverage impacts the auto industry

    The auto industry has high operating leverage. Operating leverage represents fixed costs as a percentage of total costs. High operating leverage magnifies gains and losses.

    By Henry Kallstrom
  • uploads///Sales of most efficient brand
    Company & Industry Overviews

    Government regulations push auto research and development

    Auto firms invest huge amounts of money in research and development. They have to develop more fuel-efficient models to meet government regulations.

    By Henry Kallstrom
  • uploads///Top Ten Advertisers
    Company & Industry Overviews

    Advertising is key for automotive companies

    The automotive industry is one of the biggest spenders when it comes to advertising. General Motors (GM) paid out $928 million during the first half of 2014.

    By Henry Kallstrom
  • uploads///Job creator
    Company & Industry Overviews

    Why the automotive industry generates employment

    The automotive sector plays a crucial role in job creation. Car manufacturing activity has an employment multiplier value of five.

    By Henry Kallstrom
  • uploads///Cost Components
    Company & Industry Overviews

    Raw materials – the biggest cost driver in the auto industry

    Raw materials contribute about 47% to the cost of a vehicle. On average, an automobile is 47% steel, 8% iron, 8% plastic, 7% aluminum, and 3% glass.

    By Henry Kallstrom
  • uploads///US Luxury Market
    Company & Industry Overviews

    Daimler and BMW dominate the luxury car segment

    German automakers lead the luxury space in the US. Daimler AG had an 18.4% share. It was followed by BMW. It had a 16.8% share.

    By Henry Kallstrom
  • uploads///Table segment
    Company & Industry Overviews

    Certain automakers dominate the different car segments

    The domestic giants have a significant US presence in trucks. These automakers show their muscle in the midsize SUV segment.

    By Henry Kallstrom
  • uploads///US Vehicle Sales
    Company & Industry Overviews

    The US automotive industry’s big guns are declining

    The competition between light trucks and cars characterizes the US automotive market. Over the past four years, consumers steadily moved towards SUVs and pickups.

    By Henry Kallstrom
  • uploads///Revenue share of domestic market
    Company & Industry Overviews

    Global automakers dominate in their own country

    In the 1980s, the US, Europe, and Japan together manufactured 90% of the world’s vehicles. The global automakers spawned from these regions.

    By Henry Kallstrom
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