Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The car industry is racing ahead thanks to popular credit schemes enabling consumers to get the latest cars at low monthly prices. New UK car registrations exceeded 2.6 million units in 2015, according to the Society of Motor Manufacturers & Traders, marking four years of consecutive growth.
Car sales in the US hit a record 17.5 million in 2015 and European car sales are also improving.
There is a wealth of opportunity for UK investors to play this theme thanks to numerous companies on the London Stock Exchange being linked to the automotive industry. Here are four stocks keeping the wheels turning on the road.
Lovely motor
Marshall Motors has been one the best performing car retailers on the UK stock market so far in 2016. Its share price is up 11% to 205.8p versus a 1% decline in the FTSE All Share index, which is one of the key benchmarks for UK equities.
The shares have been given a fuel injection by the £107 million acquisition of rival Ridgeway in May 2016 which moves Marshall from being the tenth to seventh largest UK motor deal group with £2.1 billion of sales.
Crash test dummy
AB Dynamics undertakes track trials for vehicle steering and suspension. This includes the provision of driving robot systems to test vehicles in crash scenarios. Clients include all of the world's top 20 automotive manufacturers such as Honda, Toyota, Ford and Volkswagen.
The AIM-quoted business is working on increasing its manufacturing footprint from 20,000 square feet to 53,000 square feet by 2017 to take advantage of increasing demand for its ADAS driver assistance system as well as soft crash testing services.
The strength of Britain's domestic automotive market means it supports an efficient supply chain which can compete with international businesses both at home and abroad.
Formula 1
Anyone seeking exposure to the sportier end of the motor market should look at Ricardo. It develops and assembles engines for McLaren, as well as undertaking emissions testing for many of the big names in the car market.
Ricardo also manufactures specialist products for Formula 1 teams and designs transmissions for a number of motorsport formats as well as sports car brand Bugatti.
Keep on trucking
Castings makes precision-engineered parts mainly for the commercial vehicle market. Around two-thirds of Castings' products, primarily specialist structural, suspension and engine parts, are exported.
Most of Casting's customers are in Europe with the lion's share in Sweden, which hosts heavy truck manufacturers Scania and Volvo.
This market backdrop has continued to be favourable, according to the European Automobile Manufacturers Association. Commercial vehicle registrations were up 17.8% in February 2016 and 14.5% in the first two months of the year compared to the same period in 2015.
This article is provided by Shares Magazine. Shares publishes information and ideas which are of interest to investors. It does not provide advice in relation to investments or any other financial matters and does not guarantee the accuracy or completeness of the information in this article.
Investors acting on the information in this article do so at their own risk and AJ Bell Media Limited and its staff do not accept liability for losses suffered by investors as a result of their investment decisions. Shares is published by AJ Bell Media Limited part of AJ Bell.