The automotive business in Brazil is big business for some banks. BMG Bank is one of those banks. BMG Bank director Marcio Alaor has built a very profitable automobile loan business in Brazil, so he stays up-to-date on the financial conditions of the automobile companies. BMG Bank makes new and used loans, so it is important for Alaor to keep up with recalls, changes in stock prices and any other issues that might impact the value of automobiles. Alaor is one of the top bankers in Brazil.
The recent issues that Volkswagen is experiencing is a good example of how quickly automobile stock can drop in value. Consumers stop buying from companies that have damaged reputations, and it may take them years to get those customers back. That’s why Alaor is tuned into stock prices, and any news that concerns automobiles and automobile manufacturing.
Alaor believes Initial public offerings (IPO) of automobile stock helped the stock market grow over the years. General Motors has been traded on the stock exchange for more than 100 years, and Ford has been traded for more than 60 years. The value of General Motors today is more than $53 billion and that is just one automobile company. Automobile stocks are hot this year. Car sales are running well ahead of 2014, and most automobile stocks have increased in value.
The automobile companies haven’t suffered a major amount of recalls in 2015, but there are always recalls, according to Alaor, and they impact automobile values. BMG Bank and other banks that make automobile loans are careful when they grant those loans. Some automakers are better than others in the lender’s eyes, and that can impact the amount of money a lender will lend.
Most of the automakers are performing well in stock markets around the world this year, but there are exceptions. Nissan stock is down 18 percent; Ferrari is down 10 percent; Ford Motor Company is down 10 percent; Porsche is down 42 percent, and Volkswagen is down 35 percent.
There are many factors that impact the value of automobile stocks, so Alaor and his team at BMG Bank are constantly monitoring automobile statistics. The good news is people in Brazil are buying cars in spite of the recession and the high inflation rate. Brazilians love their cars and automobiles are usually the first purchase they make when they can afford a consignment credit loan.
Source: Exame Magazine