BUY HOLD SELL - APE
What to make of the car market?
2018 was not a good year for the car market. Australians bought 1,153,111 new cars last year – a drop of 36,000 (-3%) from the year prior after three years of growth. Sales in almost every passenger segment dropped, except SUVs which boomed.
It gets worse. Australian new car sales fell sharply in December compared to the same month a year earlier. Some of the steepest declines were seen in NSW (-19.7%) and Victoria (-17.9%), the states where home prices fell the most in 2018. Clearly the wealth effect is having an impact.
So, why on earth would we look at an automotive retail company?
In short, it’s always darkest before the dawn. We think the housing market will bottom...Continue Reading