How benchmarks / indexes track the automotive sector?

Benchmark indexes are designed to depict the general performance of a certain market sector by including a small handful of stocks. When measuring the health of numerous market sectors and the profitability of an investment portfolio, benchmarks are invaluable tools for analysts and investors alike. Indexes such as the S&'''P 500 can be used to compare the performance of a particular market sector to the whole market, such as the S&'''P 500 Index. Investors can use index returns as a benchmark to compare the performance of various portfolios, funds, and stock picks.

Automobile Trends in the S-Network

Compared to the Nasdaq QMX, the S-Network Global Automotive Index is more comprehensive in its coverage of the automotive sector. Stocks of firms that produce and distribute car parts or provide auto-related services are included in addition to the big automakers. Nasdaq and S-Network Global Automotive use indexes based on modified market capitalization. For this Index, the top 50 worldwide firms that generate at least half of their income from the car sector are included.

ACWI (Automotive Components and Components)

In addition to 23 developed and 23 developing market countries, the MSCI ACWI Automobile &''' Components Index includes a mix of mid to late and large-cap companies. Cars and components are included in the wider consumer discretionary sector. Therefore all of the Index's stocks fall into this category. Bridgestone and Johnson Controls are also included in the major car component suppliers list.

The automobile sector's decarbonization falls well short of the 1.5°C targets.

The world's most powerful automobile companies are lagging in reducing greenhouse gas emissions. In the third year of this benchmark, the company's performance in attaining the objective of 1.5°C has deteriorated significantly. In 2020, 7% of the 30 analyzed firms' sales came from low-carbon vehicles. In recent years, Tesla, Guangzhou Automobile, and Daimler have significantly advanced electric vehicle development.

But generally, sales of low-carbon cars are dwarfed by the world's top carmakers' vast quantities of internal-combustion engine sales. Automobile manufacturers must rapidly reduce the number of automobiles with internal combustion engines they sell and replace them with low- or no-carbon-emission automobiles.

Despite their seeming readiness to make the shift

Improvements in planning and preparation to transition to a low-carbon business may be shown in the benchmark for 2021. To cut emissions and promote sales of low-carbon vehicles, automotive makers are increasingly establishing goals. However, only a small number of businesses have made financial commitments to support their transition strategies, and most emissions targets fall short of the 1.5°C thresholds. According to our findings, none of the evaluated firms has established a company-wide goal for vehicle in-use emission that is bold enough to align with a 1.5°C route.

Customers and suppliers must be included in the transition to a low-carbon economy.

Customers, suppliers, and policymakers all have a role in the sector's change. When promoting low-carbon vehicle sales above traditional vehicle sales, only 11 out of the 30 firms studied had made any real efforts. Except for Tesla and corporations with headquarters in China, where lobbying is not required to be disclosed, every company on the list is a member of a trade group that opposes climate legislation. As a result, the benchmark shows a lack of interaction with suppliers and a failure to leverage buying power to encourage low-carbon product development. Most corporations fail to leverage their influence with key stakeholders to speed the transition toward a low-carbon economy.

The automotive industry has a lot of work to undergo a decent transformation.

People at the core of the present carbon-intensive systems must also become active agents of change for the global shift to low-carbon economies to succeed. This can only be done if the transition is socially equitable. WBA's 2021 pilot Just Transformation Assessment also looked at the 30 most important automakers in the benchmark.

To ensure that their sector's low-carbon transition is socially equitable and offers people a key role within the planned improvements, the results suggest they have much to do. Even worse than electricity companies and gas and oil firms, the car industry is the lowest performer in this area.

May saw a slight reduction in automobile industry price pressure

Because of the supply concerns, prices remained extremely high in May. That being said, the Global Automobiles &''' Auto Parts industry showed early signs of lowering both input cost and output price inflation in May.

Across Europe's Automobiles and Auto Parts sector, inflation in both input costs and output prices decreased from their record levels in April. For the second month, input costs climbed faster across all European business sectors examined. Prices in Asia, meanwhile, showed indications of softening, with both import and production costs growing at a considerably slower rate than in Western economies.