Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

With Toyota Gone, California's Loss Is Our Gain

Companies / US Auto's Jun 06, 2014 - 03:14 PM GMT

By: Money_Morning


Michael A. Robinson writes: It's almost impossible to overstate the significance California has played in making Toyota Motor Corp. (ADR) (NYSE: TM) a U.S. success.

The Japanese firm set up its headquarters in Hollywood back in 1957. It used its surging popularity in this car-crazy, trendsetting state to become not just a major American nameplate but a dominant global brand.

No wonder California leaders were so shocked when they recently learned that Toyota is pulling up stakes in the Golden State. Toyota now plans to build a new North American headquarters in Plano, Texas, taking 3,000 jobs with it.

This surprise decision sparked an intense political debate here in California in which critics accuse the state's leaders of pursuing a political agenda that is clearly anti-business.

That may very well be true, but behind the scenes there is a much larger dynamic taking place - the rise of a truly global marketplace.

And it's giving us a beautiful, long-term, market-crushing opportunity...

Amidst Boom Times, Production and Profits Are Shifting

See, even the Sunbelt is losing its status as the auto industry's North American epicenter as more production is shifted to Mexico. Analysts say roughly 40% of all North American auto jobs are now in Mexico, up from 27% in 2000.

The Sunbelt accounts for another 30%, meaning two-thirds of all auto jobs (seen as a proxy for production) are now outside the industrial Midwest.

These trends are particularly important for technology investors because new cars and trucks have become showcases for such components as sensors, semiconductors, micro-controllers, and GPS, to name a few.

And make no mistake; we're in the midst of a major auto boom...

Double- and Triple-Digit Increases Mark the Trend

Consider that last month, U.S. sales rose 11% to 1.6 million vehicles. On an annualized basis, that amounts to a rate of 16.77 million cars and light trucks, according to market researcher Autodata Corp. Moreover, that's a 16% increase from the same month in 2012.

Here's the thing: Sales in China over the past two years are growing at twice that 16% rate, according to analysts at Scotiabank. They're projecting 2014 sales of 18.86 million vehicles, for a two-year gain of 39%.

And when you take the long view, the global market looks even more impressive. For instance, over the past quarter century, auto sales in Eastern Europe are up 245%. Over the same period, they've gained 190% in Latin America and 334% in Asia.

That's why I think investors would do well to take a look at the First Trust NASDAQ Global Auto Index Fund (Nasdaq: CARZ). This is an exchange-traded fund (ETF) that offers a broad play on the global auto industry.

Just take a look at what's happening with the nation's largest "domestic" automaker, General Motors Co. (NYSE: GM). It's one of the fund's largest holdings.

Among GM's top five global markets by volume, China and the United Kingdom posted the largest sales increases last year on a percentage basis. Each gained 11%.

GM's Cadillac brand did even better in China, growing sales some 67% to a record 50,005 vehicles. Cadillac broke ground on a new assembly plant there last year and plans to add one new model per year in the country through 2016.

Meanwhile, archrival Ford Motor Co. (NYSE: F) is another major CARZ holding with significant global sales. This year, it plans to open two plants in the Asia-Pacific region and one in Latin America.

Last year, Ford sold nearly a million wholesale vehicles in China, a 49% increase. In 2014, the company expects to launch more new vehicles globally than it has in more than a century. And it still makes the top-selling vehicle in the U.S. - the popular F150 pickup truck.

Global Exposure to a Surging Market

Of course, there's much more going on with CARZ than just two big American nameplates.
Of the nearly 40 companies the fund owns, all but four have their headquarters outside the U.S.

For instance, Hyundai Motor Co. (OTC: HYMTF) is based in South Korea. Combined with its affiliate Kia Motors Corp. (OTC: KIMTF), Hyundai ranks as the world's fifth-largest automaker.

The company has taken recent steps to appeal to a global audience by unveiling a luxury sedan to compete with higher-end automakers like BMW. Moreover, India is a big market for the company and accounts for around 15% of its global sales.

Great Wall Motor Co. Ltd. (HKG: 2333) is a China-based automaker listed on the Hong Kong Stock Exchange. By specializing in SUVs and trucks - a growing trend in China - the company has become the largest Chinese manufacturer of such vehicles.

Great Wall has expanded its operations into Eastern Europe and other overseas locations. It has also been steadily featured on the Forbes Top 100 list of Chinese enterprises since 2004.

And Tesla Motors Inc. (NASDAQ: TSLA) gives CARZ a significant stake in the burgeoning electric vehicle market. Based in California, Tesla provides transformative technology and is using it as a global sales hook.

Tesla is working on its global brand by devising a low-priced car for the Chinese auto market. It also has big plans for Europe, where it's building a network of charging stations called Superchargers. Currently, the company has only 14 Superchargers spread across Norway, Germany, Switzerland, and the Netherlands.

But by the end of the year, Tesla will install more in those countries and also will expand into the UK, France, Spain, Italy, Austria, Denmark, and Sweden. Tesla CEO Elon Musk says the move will make it possible "to travel almost anywhere in Europe using only Superchargers" as a fuel source.

Priced at roughly $40, CARZ offers investors the chance to get a piece of Tesla at a fraction of the price of the carmaker's stock, recently trading at $204 a share.

And over the past two years, the fund has given investors 69% gains. That's nearly 40% better than the S&P 500's performance during that period.

Thus CARZ gives investors three main advantages - a play on tech-centric new vehicles, the long-term growth in the global auto market, and superior returns.

The auto tech boom is just one of the high-profit trends Michael is following. To get all of his Strategic Tech Investor research and recommendations delivered free, twice weekly, click here..

Source :

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules