Notes on EU Automotive Sector Employment

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The Automotive industry is one of the important industries in the European Union(EU). The industry provides millions of well-paid jobs and is critical to the economy of some countries such as Germany. In this post let’s take a look at some of the fascinating employment-related facts about this industry.

According to the The European Automobile Manufacturers Association (ACEA), the auto industry accounts for 12.7 jobs in the EU. This includes 2.6 million direct and 10.2 million indirect jobs. In terms of total manufacturing jobs, the industry directly provides 8.5% of all EU manufacturing jobs. In a few East European countries and Germany this figure is even higher as shown in the chart below:

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Source: The Automobile Industry, Pocket Guide 2022/2023

The following graph shows the overall split of the 12.7 million jobs:

Source: The Automobile Industry, Pocket Guide 2022/2023

Below are a few other key points about the EU auto industry:

  • The auto industry accounts for almost 7% of all EU jobs
  • Automotive employment increased by 14% over the past five years
  • 11.5% of all EU manufacturing jobs are in the auto sector
  • A total of 3.5 million people work in automotive manufacturing in the EU
  • Germany has the highest number of people employed in auto manufacturing with over 916,000 followed by Poland, Czech Republic and Romania in 2019

Many other facts can be found in the above linked report.

Related stocks:

Disclosure: No positions

How the U.S. Tax System Works: Infographic

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The US tax system is one of the most complex in the world. The tax code is 6,871 pages long according to one estimate. When all the guidelines and regulations are included it goes to 75,000 pages !

The reason for the complexity is the tax code constantly gets updated with all kinds of exclusions, deductions, etc. For example, buying a home allows for certain tax benefit if some conditions are met. I came across the following infographic that shows how the US tax system works:

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How the U.S. Tax System Works

How the U.S. Tax System Works, courtesy of Peter G. Peterson Foundation

Quickpost: Which Listed Company is Europe’s Most Valuable ?

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The most valuable listed company in Europe is French luxury giant LVMH Moet Hennessy Louis Vuitton SA (LVMUY). At the end of 2022, its market capitalization stood at $342.0 billion Euros. In US dollar terms, it was $426.0 billion as of close of Jan 20, 2023.

Below is a short except from a recent journal article:

Some original founders have served investors well. Since LVMH went public in the 1980s, the stock has generated average total returns of 17% a year, and it is now Europe’s most valuable listed company. Richemont’s long-term record is also strong, with 14% returns. Prada is the exception: Its almost 12-year run as a public company has been poor, returning only 3% annually.

Source: Luxury Tycoons Leave Big Shoes to Fill, WSJ

Luxury stocks have indeed produced excellent returns over the long run.

Among the top listed European firms in terms of market capitalization, three luxury companies take a spot as shown in the chart below. The most valuable listed firms on Euronext Stock Exchange as of Dec, 2022 (in billion Euros):

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Source: Statista

Referenced firms:

Disclosure: No positions

An Update on Chile Dividend Withholding Tax

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The Dividend Withholding Tax rate for foreign investors in Chilean equities used to be 35%. This rate has been reduced to 23.9041123%. This is a welcome news for ADR holders.

Below is the YTD returns of Chilean ADRs trading on the US exchanges:

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Source: BNY Mellon

Last year Lithium miner Soc. Quimica y Minera de Chile (SQM) had an astonishing run. It remains to be seen if this year also will be great for SQM investors.

Disclosure: Long BCH