New York, October 27: Investors in auto shares other than Tesla have a reason to rejoice now as, shares prices of several stocks have been rising substantially over the past few weeks making the Bull ride pretty much evident at the S&P, which was up by 12%.
Of late, stock prices of auto manufacturers such as General Motors, Fiat Chrysler, and Fiat are all up by more than 30% since June. While it might not be Tesla, which crossed the 150% mark, but it is definitely enough to outdo the much broader market.
The upward journey of the auto stock prices is due to a number of reasons put forward by market experts. According to them, earlier this year automakers were grieving under the storm of economic lockdown that hugely impacted the sales. Several were working from home while several others went jobless. As a result of which, the sales frequency of cars reduced a lot. Dealers, car rental companies, fleet buyers were also forced to pullback.
However, due to social distancing norm, there is an increase in demand for individual cars in the third quarter as office-goers were concerned about availing public transport.
The top three US automakers reported extensive loss except for GM, who earned a minor profit during the first financial quarter. Nonetheless, these companies stock prices should return a certain percentage of profitability by early next week.
Ahead of the return to profitmaking at the capital markets and the pandemic-related downturn in sales of cars, some investors hope that traditional American automakers may benefit from the increasing demand for electric cars.