AUTO, VTU, MOTR: Stocks in focus as car sales fall in July

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AUTO, VTU, MOTR: Stocks in focus as car sales fall in July

 AUTO, VTU, MOTR: Stocks in focus as car sales fall in July
Image source: © Williammacgregor | Megapixl.com

Highlights:

  • Car sales in July declined by nearly a tenth as global chip shortage hit the manufacturers.
  • Industry body SMMT has slashed its forecast for the current year and the next year.

The automobile industry in the UK is going through challenging times amid the global shortage of semiconductors. In July, sales of new cars declined by almost 10% due to supply chain disruptions, according to the Society of Motor Manufacturers and Traders (SMMT).

The industry body has also slashed its full-year forecast despite expectations that the shortage of semiconductors would ease in the coming months.

For July, new vehicle registrations stood at 112,162, 9% lower than July 2021. The sales for large corporate fleets fell by 18.2% to 50,014 vehicles, while the sales to consumers stood at 59,847. This is the fifth month in a row when the sales have dipped.

SMMT also slashed its full-year forecast for new car sales from 1.72 million to 1.6 million, saying the first six months of this year have been more challenging for the sector than anticipated. For the next year, the industry body has cut its forecast from 2.02 million to 1.89 million.

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Why are the sales down?

The car industry has been struggling with the semiconductors shortage since the lockdown and the closure of factories. The production is yet to reach its full capacity, but the demand has increased, leading to delays in fulfilling the orders. Recent lockdowns in China, too, have impacted the critical manufacturing and logistic centres.

Moreover, the Russia-Ukraine conflict has also contributed to the supply chain disruptions.

Amid the latest numbers from SMMT, Kalkine Media® explores some London-listed stocks that may get impacted. Take a look.

Auto Trader Group Plc (LON: AUTO)

The firm deals in new and used cars and is a constituent of the blue-chip FTSE 100 index. The auto dealer currently on Thursday, enjoyed a market capitalisation of £6,118.42 million, and its shares were trading 2.62% higher at GBX 666.40 as of 1:22 pm GMT+1 on Thursday. Its 12-month return currently stands at 2.02%, while the year-to-date return currently stands at -10.11%.  

Vertu Motors Plc (LON: VTU)

The car dealership group as of 4 August, it holds a market cap of £203.44 million, and its one-year returns at 26.91%. The year-to-date return, however, stands in the negative territory at -15.65%. Shares of the FTSE AIM All-Share constituent were 0.52% down at GBX 58.00 as of 1:09 pm on Thursday.

Motorpoint Group Plc (LON: MOTR)

Motorpoint Group is an independent vehicle retailer in the UK with both online and physical stores. It retails in new and used vehicles. The company holds a market cap of £175.87 million, and its stock has fallen by more than 44% in the past 12 months. Its share price stood at GBX 195.00 as of 1:04 pm on 4 August 2022.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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