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Auto Stock Roundup: Weak U.S. Sales, Strong China Sales for Ford, GM
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Weak U.S. sales figures for August reported last week, raised concerns over plateauing volumes. Meanwhile, Ford Motor Co. (F - Free Report) and General Motors Company (GM - Free Report) posted strong sales in China. Even Tata Motors Limited reported strong global sales volumes.
Meanwhile, General Motors also settled two bellwether ignition switch-related lawsuits. Further, Tesla Motors, Inc. (TSLA - Free Report) found a new source of financing for its vehicle leasing program.
1. U.S. light-vehicle sales dropped 3.5% year over year to 1.51 million units in Aug 2016, as per Autodata. This is the third month of a sales decline this year. Moreover, sales on a seasonally adjusted annualized rate (“SAAR”) basis declined to 16.97 million units in the month from 17.86 million units in Jul 2016 and 17.79 million units in Aug 2015.
General Motors was the leader in terms of sales volume for Aug 2016. Among the six major American and Japanese automakers, FCA US was the only one to record year-over-year sales improvement last month (read more: US Auto Sales Fall in August: What to Expect in the Future?).
2. General Motors has settled the last two bellwether cases related to its ignition switch defect. However, the settlement amount was not revealed. These cases were intended to set the guidance for the remaining ignition switch-related cases against General Motors. The company has many other death and injury claims still pending. General Motors currently has a Zacks Rank #3 (Hold) (read more: General Motors Settles 2 Bellwether Ignition Switch Cases).
3. Tesla announced a new Loan and Security Agreement with Deutsche Bank, under which it can borrow up to $300 million for its direct vehicle leasing program till Aug 31, 2017. Any amount drawn under this agreement will be due on Sep 20, 2018. As a result of this agreement, the company can reduce the amount it was earlier planning to raise from the public market. Tesla currently carries a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
4. Both Ford and General Motors reported their respective China sales figures for Aug 2016. General Motors and its joint ventures in China reported an 18% year-over-year increase in deliveries to a record 293,537 vehicles. Meanwhile, Ford’s sales in China increased 22% year over year to 96,450 units during the period, which is an August record for the company.
5. Tata Motors reported a 6% increase in total sales of its commercial and passenger vehicles, including exports, to 43,061 units in Aug 2016 from 40,679 units in Aug 2015. Cumulative sales from April through August were 209,950 units, up 6% over the prior-year period. The year-over-year increase in August was due to higher passenger car sales in the domestic market as well as exports, which offset the decline in commercial vehicle sales. Tata Motors carries a Zacks Rank #2 (Buy).
Performance
Auto sector companies had mixed fortunes on the stock market last week. Advance Auto Parts Inc. (AAP - Free Report) gained the most, while Tesla was the biggest loser among the stocks listed below.
Over the last six months, Toyota Motor Corporation (TM - Free Report) outperformed the others. Meanwhile, AutoZone, Inc. (AZO - Free Report) lost the maximum value over the longer term.
A few automakers may report their European auto sales for August in the coming week.
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Auto Stock Roundup: Weak U.S. Sales, Strong China Sales for Ford, GM
Weak U.S. sales figures for August reported last week, raised concerns over plateauing volumes. Meanwhile, Ford Motor Co. (F - Free Report) and General Motors Company (GM - Free Report) posted strong sales in China. Even Tata Motors Limited reported strong global sales volumes.
Meanwhile, General Motors also settled two bellwether ignition switch-related lawsuits. Further, Tesla Motors, Inc. (TSLA - Free Report) found a new source of financing for its vehicle leasing program.
(Read the previous roundup here: Auto Stock Roundup for Sep 1, 2016)
Recap of the Week’s Most Important Stories
1. U.S. light-vehicle sales dropped 3.5% year over year to 1.51 million units in Aug 2016, as per Autodata. This is the third month of a sales decline this year. Moreover, sales on a seasonally adjusted annualized rate (“SAAR”) basis declined to 16.97 million units in the month from 17.86 million units in Jul 2016 and 17.79 million units in Aug 2015.
General Motors was the leader in terms of sales volume for Aug 2016. Among the six major American and Japanese automakers, FCA US was the only one to record year-over-year sales improvement last month (read more: US Auto Sales Fall in August: What to Expect in the Future?).
2. General Motors has settled the last two bellwether cases related to its ignition switch defect. However, the settlement amount was not revealed. These cases were intended to set the guidance for the remaining ignition switch-related cases against General Motors. The company has many other death and injury claims still pending. General Motors currently has a Zacks Rank #3 (Hold) (read more: General Motors Settles 2 Bellwether Ignition Switch Cases).
3. Tesla announced a new Loan and Security Agreement with Deutsche Bank, under which it can borrow up to $300 million for its direct vehicle leasing program till Aug 31, 2017. Any amount drawn under this agreement will be due on Sep 20, 2018. As a result of this agreement, the company can reduce the amount it was earlier planning to raise from the public market. Tesla currently carries a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
4. Both Ford and General Motors reported their respective China sales figures for Aug 2016. General Motors and its joint ventures in China reported an 18% year-over-year increase in deliveries to a record 293,537 vehicles. Meanwhile, Ford’s sales in China increased 22% year over year to 96,450 units during the period, which is an August record for the company.
5. Tata Motors reported a 6% increase in total sales of its commercial and passenger vehicles, including exports, to 43,061 units in Aug 2016 from 40,679 units in Aug 2015. Cumulative sales from April through August were 209,950 units, up 6% over the prior-year period. The year-over-year increase in August was due to higher passenger car sales in the domestic market as well as exports, which offset the decline in commercial vehicle sales. Tata Motors carries a Zacks Rank #2 (Buy).
Performance
Auto sector companies had mixed fortunes on the stock market last week. Advance Auto Parts Inc. (AAP - Free Report) gained the most, while Tesla was the biggest loser among the stocks listed below.
Over the last six months, Toyota Motor Corporation (TM - Free Report) outperformed the others. Meanwhile, AutoZone, Inc. (AZO - Free Report) lost the maximum value over the longer term.
Company
Last 1-Week Period
Last 6 Months
GM
-0.1%
+3.9%
F
+0.8%
-4.0%
TSLA
-4.9%
-0.4%
TM
+0.1%
+14.1%
HMC
+0.2%
+12.1%
HOG
0.0%
+12.5%
AAP
+2.9%
+8.2%
AZO
-1.3%
-4.3%
Auto-Tires-Trucks Sector Price Index
Auto-Tires-Trucks Sector Price Index
What’s Next in the Auto Space?
A few automakers may report their European auto sales for August in the coming week.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>