European car stocks
European Car Stocks
Iam going to share my thoughs about the European Car Stocks and where they might be heading. The dieselgate and climate change has not really affected the European car stocks, at least not yet. The European car stocks has had a brilliant rise in stock value during the last year (2017-2018). On average, the biggest car stocks have risen by 30 %.
Well I think thats going to change. And here is why I think so.
The Swedish Central Bank is soon going to have a meeting (I think in november) where they will discuss to increase interest rates. A lot of people here in Sweden buy cars on rates, especially young people. If the rates start to rise, less people are going to afford owning new, expensive cars. Other banks in European Union wants to impose higher rates as well.
Stronger euro, dollar and a weaker Swedish crown makes it hard to buy cars from outside my country. For example 1 dollar makes around 9 Swedish crowns ( 2018.09.03), this means that the Swedish crown is historcally weak towards the USD. For us in Sweden its a bad time to invest in US or to import US made cars. The EUR/USD is around 1.16. This contributes the fact that it is not so attractive to import US made cars on a mass scale.
Diesel scandal in Germany sended echoes in all over the European Union. Swedish goverment and especially the enviroment party called Miljöpartiet was eager too bann all diesel cars! They wanted to bann all diesel cars starting within Stockholm. I remember one time it was all over the news every day for three weeks non-stop. In the morning I could read breaking news such as “Your diesel cars is crap”, or “If you have a diesel car you are soon to be banned from entering major cities in Sweden”. It made me scared and not just me, a lot of people in Sweden/Stockholm sold their diesel cars. Prices went down. It was hard to sell a diesel EU5 car for good money. I owned a diesel car back then, an expensive one for my economy. I knew that they would not ban me from entering Stockholm in the near future. But still I had thoughts like: “Would there be a buyer if I wanted to sell the car later on?”.
Donald Trump wants to impose around 20-25% tariff on cars mainly from Germany. Since 1995 the US have a tariff of around 2,5% and the European Union have a tariff of around 10%. It may seem unfair but there are other products for exemple US takes a tariff on light trucks of 22.4% if imported from European Union. Its not yet impossed, but you never know with Donald Trump and what he comes up with next. This could be the start of a new trade war and bring up the prices of cars both in Us and E.U
You also have Tesla and other Japanese cars that are green cars. They are environmentally friendly at the same time have cool looking styles. Maybe this is the future?
People in Sweden are a little torn when it com to what car to buy. The country side have long distances to the major cities. Most of people still live in small towns. The winters are cold and diesel would be the ultimate car in Sweden, or so we thought.
In Winter energy losess are greater then in summer if you drive electric car like for exemple a Tesla. You cannot really depend on getting to your destination without stoping a couple of times on a cold winter in Sweden. A lot of people are woundering if you could put a trailer on a electric car on a cold Swedish winter. How long could you pull the trailer before you run out of electric energy.
Question is: are electric cars that enviroment friendly? What about the big battery who is going to take care about the disposal?
To produce a battery with 100 kWh like the one in the Tesla. About 20 tonnes of Co2 emission is released to the atmosphere. Mercedes E 220d have an emission of 102 grams of Co2 / km, which means that in mixed driving, you could travel between 9000 miles to reach up to the 20 tonnes only then Tesla would start to be enviroment friendly.
Swedendivin conclussion is that bigger car stocks maybe has had their peak for this time. Future is green but we have a long way still to go. Only time can tell, for sure. I have Daimler stock but iam not increasing, not yet until i see more green Daimler. So for now I am laying low concentrating on other sectors. Though, we will always need transportation.
Here is a picture of me and my first car. A Felicia 1.3 petrol engine 58 hp. Iam the driver and my two friends are also from the Medical University. In the picture we are taking a rest after driving 20 hours with no sleep. Lake Balaton was our destination.