Monday, March 27Welcome

Nissan, Stellantis top picks as Nomura eyes car stocks (NYSE:STLA)

Kia Telluride display at the dealer. Kia Motors is a minority shareholder of Hyundai Motor.

jetcityimage/iStock Editorial via Getty Images

In a review of the global auto industry, Nomura’s team of analysts indicated that while auto demand in Japan and the United States is likely to remain strong through 2023, the Chinese market could prove much more difficult. rice field.

“We expect market conditions for the global automotive industry to vary significantly by region.

China and the United States, the two largest automotive markets, are on opposite ends of the spectrum,” said the team. “Within the U.S., Japanese and Korean OEMs are likely to outperform, while U.S. peers will be bogged down by high exposure to the full-size pickup truck segment, which correlates with a slowdown in housing construction. is doing.”

Within China, both Tesla (TSLA) and BYD Company (OTCPK:BYDDY) are expected to remain top performers as EV adoption continues to accelerate. Other domestic and foreign Chinese competitors are expected to be adversely affected by “hard price competition” and lower demand for his 2023. Meanwhile, Japanese hybrid players such as Toyota (TM) and Honda Motor (HMC) are expected to continue to perform well. In a large automotive market, despite unfavorable market dynamics.

In the Japanese market, demand is expected to rise due to production restraints due to shortages of parts in recent years, which is expected to push up sales even if prices rise. A similar move is expected in South Korea, offering opportunities for both Kia and Hyundai (OTCPK:HYMLF). Japan and the US are projected to underpin global demand growth of 6% in 2023.

“Our top global pick is Kia.New York Stock Exchange: STLA),” the analyst concluded. “We are positive on Kia’s sales outlook and pricing power in 2023, increased market share in the US, limited exposure to China and near-record low global inventories. We believe potential demand for Kia’s models is strong, despite investors’ concerns about economic headwinds.”

For Stellantis (STLA), difficulties in its European home market are expected to be offset by opportunities available in the United States.

“Given STLA’s EV rollout in North America at an appropriate pace, benefiting from post-merger platform integration in Europe starting in 2023, and limited exposure to China, 2023 EV battery We like Stellantis given the low risk of margin pressure from material prices, which should lead to lower long-term geopolitical risk and protect the company from a near-term slowdown in the region,” the team said. Stated. “The stock price looks cheap to us.”

Learn more about Nissan’s EV investment.

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