Published on 5 Apr 2022 on Zacks via Yahoo Finance

2 Buy-Ranked Foreign Auto Stocks to Escape Industry Woes

Prospects of the Zacks Automotive – Foreign industry appear muted as companies are battling the global shortage of semiconductor supply, which has gotten all the more exacerbated by the rising coronavirus cases in China and the armed conflict between Russia and Ukraine. Manufacturing inefficiencies, high commodity costs, and escalating capex and research & development (R&D) costs for the development of electric vehicles (EVs) may strain the near-term margins of automakers. Two stocks that seem to be standing tall amid multiple headwinds surrounding the industry are Mercedes-Benz Group AG DDAIF and Suzuki Motor Corporation SZKMY.

Industry Overview

Companies in the Zacks Automotive – Foreign industry are involved in designing, manufacturing, distributing, and selling vehicles, components as well as production systems. The foreign automotive industry is highly dependent on business cycles and economic conditions. China, Japan, Germany and India are some of the key foreign automotive manufacturing countries. Widespread usage of technology is resulting in fundamental restructuring of the market. Stricter emission and fuel-economy targets, ramp up of charging infrastructure as well as supportive government policies are boosting sales of green vehicles. With almost all firms heating up their electrification game, competition is getting stronger with each passing day. Foreign automakers are now actively engaged in the R&D of electric and autonomous vehicles, fuel efficiency along with low-emission technologies.