Auto-related stocks to watch as used car prices fall

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 Auto-related stocks to watch as used car prices fall
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Highlights:

  • According to data from the Office for National Statistics, used car prices have fallen amid the easing supply chain issues.
  • This is the first month to report a negative growth in price ever since the pandemic struck.

The COVID-19 pandemic brought supply chain issues for the automobile industry as closed factories halted the production of components. Due to this, the prices of cars went up. But the problems are now easing, leading to a fall in used vehicles rates.

The latest data from the Office for National Statistics (ONS) shows that the average price for second-hand cars slipped by 2.7% in the 12 months to October, indicating the easing supply chain restrictions.

Due to rising prices and long waiting period for new cars, people are now opting for used cars as they are readily available.

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This is the first month to report negative price growth since the pandemic struck. But compared to the same period last year, it represents a 23% growth, meaning the prices are higher than in the pre-COVID period.

In the year, the prices of second-hand cars have increased by about 30% annually. The primary reason behind this increase is the global shortage of semiconductors caused by the pandemic-related lockdowns. Experts say there was also bigger demand during COVID, as people preferred to travel via personal vehicle instead of public transport.

Let us explore some auto-related stocks listed on the LSE.

Auto Trader Group Plc (LON: AUTO)

Auto Trader Group is a classified business that deals in second-hand cards. It belongs to the FTSE 100 index. With an EPS of 0.26, the company currently holds a market cap of £5,194.71 million. Its stock price has slipped by more than 21% over the past 12 months. The turnover (on book) stands at £884,553.91. Shares of the company traded at GBX 561.00, 0.94% up at 10:21 am GMT.

Motorpoint Group Plc (LON: MOTR)

Motorpoint Group is an independent auto retailer. It deals in both new and old vehicles. Holding a market cap of £141.60 million, the group belongs to the FTSE All-Share index. It has an EPS of 0.08, and its share price has tumbled more than 50% in the last year. The stock’s last close was GBX 157.00.

Vertu Motors Plc (LON: VTU)

The new and used car dealer holds a market cap of £165.92 million and an EPS of 0.17. The stock value of the FTSE AIM All-Share constituent has fallen more than 23% over the past year. Its last close was at GBX 47.55.

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