What are tariffs and how do they affect auto stocks?

Tariffs are taxes imposed on imported goods. In the auto industry, the U.S. has placed significant tariffs on vehicles imported from Europe and China. This makes foreign-made cars more expensive for American consumers, creating a price advantage for vehicles manufactured within the United States. Companies with U.S.-based manufacturing facilities can avoid these extra costs, potentially leading to higher sales, market share gains, and improved profit margins compared to their import-dependent competitors.

What is the automotive value chain?

The automotive value chain refers to all the companies and activities involved in bringing a vehicle from concept to consumer. This includes original equipment manufacturers (OEMs) like GM and Ford who assemble the vehicles, Tier 1 suppliers who provide major components directly to OEMs, Tier 2 suppliers who make smaller parts, dealerships that sell the vehicles, and aftermarket companies that provide replacement parts and services. This stock group includes companies from all these segments, offering broad exposure to the domestic auto industry that's benefiting from tariff protections.

What does "market share capture" mean for these stocks?

Market share capture refers to a company gaining a larger percentage of total industry sales. In this context, U.S.-based auto companies could take customers away from foreign competitors who are forced to raise prices due to tariffs. For example, if Volvo must increase prices on its imported vehicles, a customer might choose a similarly-equipped but less expensive Ford or GM vehicle instead. This shift in consumer purchasing behavior can lead to higher sales volumes and greater economies of scale for domestic manufacturers, potentially boosting their stock performance.

How might dividend yields benefit investors in these stocks?

Dividend yield represents the annual dividend payment as a percentage of the stock's current price. Many established automotive companies pay regular dividends to shareholders. As these companies potentially benefit from tariff protections and increased domestic market share, they may generate more cash flow that could support stable or even increasing dividend payments. For investors, these dividends provide regular income in addition to any potential stock price appreciation, which can be particularly attractive during uncertain market conditions.

15 handpicked stocks

U.S. Auto Tariff Shield: Domestic Winners

This carefully selected group of stocks represents American automotive companies positioned to benefit from U.S. tariffs on imported vehicles. These domestic manufacturers and suppliers have a competitive pricing advantage that could lead to increased market share and profits.

Han Tan | Market Analyst

Published on July 20

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

General Motors Co.

Current price

$59.36

General Motors has extensive U.S. manufacturing, positioning it to benefit from tariffs on imported vehicles.

Ford Motor Co.

Current price

$12.22

Ford's American factories shield it from import tariffs while competitors face higher costs.

Stellantis NV

STLA

Current price

$10.40

Stellantis (Chrysler's parent) has significant U.S. manufacturing, giving it tariff advantages.

American Axle & Manufacturing Holdings I

AXL

Current price

$6.08

Lear Corp.

LEA

Current price

$102.25

BorgWarner Inc.

BWA

Current price

$44.42

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+7.22%

≈

About This Group of Stocks

Our Expert Thinking

Recent U.S. tariffs on imported vehicles have created a competitive advantage for domestic automakers and suppliers. Companies with U.S. manufacturing facilities can avoid these import duties, making their products more attractively priced compared to foreign competitors like Volvo who are now reporting significant profit declines.

What You Need to Know

This collection spans the entire automotive value chain, including manufacturers (GM, Ford, Stellantis), parts suppliers, dealerships, and aftermarket service providers. These companies are positioned to capture increased market share and potentially expand profit margins as import-dependent competitors face pricing challenges.

Why These Stocks

We've selected companies across the full automotive ecosystem with substantial U.S. operations that shield them from import tariffs. This creates a protective "moat" around their businesses, potentially allowing them to gain customers from international competitors who must now raise prices or absorb tariff costs.

Group Performance Snapshot

7.22%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 7.22% over the next year.

9 of 15

Stocks Rated Buy by Analysts

9 of 15 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🛡️

Protected from Foreign Competition

These companies operate behind a tariff "shield" that makes their foreign competitors' products more expensive. This built-in price advantage could translate directly to higher profits and market share.

🏭

Made in America Momentum

With Volvo and other foreign automakers reporting major profit drops due to tariffs, American manufacturers are positioned to fill the gap. This shift to domestic production creates a potentially lasting advantage.

💰

Policy Winners You Shouldn't Miss

Trade policies are creating clear winners and losers in the auto industry. This carefully selected group represents companies that stand to benefit from this shift, from manufacturing all the way to parts and service.

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