All of us get use to what we consider to be normal. In the auto industry, the big auto plants of Detroit was the engine of growth for the economy built on the internal combustion engine. As as young person you or someone you know learnt about the engine and considered it to be normal. The world is changing and by 2030, the world will see more electric vehicles on the road. It will be normal.
The major difference with electric vehicles is they require less parts and less people to build, which means those industries are going to change over the next decade. How they change and the communities where the auto parts are located will be considerable political words spoken.
In an article by Jack Ewing of the New York Times News Service, Mr. Ewing examines the Oehringen, Germany region which has many auto parts plants. All of the world, the auto parts are made and then sent to the auto assembly plants where they are put together. This combination has proven to be successful and profitable for both auto parts companies and the autos we purchase at the dealership. As some point by 2030, they will be a drastic decline in auto parts as electric vehicles take a larger share of the market, partly driven by government incentives and concerns about green house gas.
Linking to dividend paying stocks, all industries change as government policies change. Companies that easily made profits, their margins decrease and that is an important metric for investors. As the profit margin decreases, how does the company make money? For your investments, what are the profit margins of the company when you bought your shares and what is now? It is important to keep this important metric, so you can look for alternatives.
There are more questions than answers, till the next time – to raising questions.