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Auto Stock Roundup: SUV Sales Up in August, Toyota Faces Recall Mess
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Past week witnessed the leading automakers releasing August sales figures. The shift toward roomier sports utility vehicles (SUVs) in place of passenger cars has again been vindicated in the latest sales figures. Overall, a small increase in August sales has been built around strong rise in SUV sales, robust consumer confidence and low level of unemployment. Uncertainty associated with trade policy, rising interest rates and fuel prices acted as deterrents to auto sales.
On the other hand, news pertaining to electric vehicles hogged the limelight in the past week. Per Wall Street Journal, General Motors Company’s (GM - Free Report) plans to produce additional electric vehicles in China have received a setback. This auto giant has been embroiled into trouble as the batteries made in China failed in meeting the performance and safety standards at the time of testing.
On the contrary, Daimler AG’s Mercedes-Benz has unveiled its first fully-electric crossover SUV, EQC, in Stockholm. The company’s new all-electric vehicle will compete with top-spot vehicles by other automakers within the electric vehicles category.
In another event, Japanese auto giant Toyota Motor Corporation (TM - Free Report) has been embroiled in a recall issue. The company announced a global recall of more than 1 million of its Prius and C-HR compact crossover cars, per Bloomberg. The affected vehicles have the risk of catching fire.
1. General Motors’ plans to produce additional electric vehicles (EVs) in China have received a jolt, per Wall Street Journal. This auto giant has been embroiled into trouble as the batteries made in China failed in meeting the performance and safety standards at the time of testing.
Notably, in June this year, General Motors disclosed plans to deliver 10 new EV models in China by 2020. This auto giant has also announced that between 2021 and 2023, it is going to raise the number of EV models to 20 in China. In fact, the company has already launched Cadillac CT6 Plug-In, Buick Velite 5 extended-range EV and Baojun E100 EV in China. But, per Wall Street Journal, the company’s plans to launch the Velite 6 plug-in hybrid EV in China have been impacted due to battery problems.
China is playing a pivotal role in the transition toward zero emissions future. Like many other automakers, General Motors has also been actively involved in this transition process. This Detroit, MI-based automaker is going to continue expanding its EV portfolio in the mainland and it has stated that the battery issue is not likely to have much impact on its EV building plans in China. (Read more: General Motors' EV Plan in China Shifts to Low Gear)
General Motors currently carries a Zacks Rank #5 (Strong Sell).
2. Daimler Mercedes-Benz has unveiled its first fully-electric crossover sports utility vehicle, EQC, in Stockholm. The company’s new all-electric vehicle will compete with other top-spot vehicles by other automakers within the EV category.
As a battery-powered vehicle, the model has a driving range of more than 450 km, with two electric motors in the front and rear axles that will offer a combined output of 300 kW. Further, its flawless and clear design embodies a progressive luxury car. These features will attract luxury and technologically proficient customers.
This is in sync with Daimler’s target of launching up to 10 variants of EVs by 2022. Per management, the company expects EQC and its other EV variants to contribute 15-20% to sales in 2025. Further, its planned introduction of 10 EVs will be able to support almost 60% of the EV market. (Read more: Daimler's Mercedes-Benz Introduces First Electric SUV)
Daimler currently carries a Zacks Rank #5.
3. Toyota announces a global recall of more than 1 million of its Prius and C-HR compact crossover cars, per Bloomberg. The affected vehicles have the risk of catching fire.
Out of the 1.03 million recalled vehicles, 192,000 are from the United States and 554,000 are from Japan. This affects the latest Prius model, which includes a plug-in variant, whose production has been initiated in 2015. The current generation of hybrid C-HR, manufactured until May 2018, has also been recalled.
The affected vehicle’s engine wire harness, which is linked to the power control unit, may damage over time that can lead to a short circuit or fire. Per management, one case of smoke emission from a car has been reported without any injuries. (Read more: Toyota Recalls 1M Prius & C-HR Units Over Wiring Issue)
4. FCA US, a member of Fiat Chrysler Automobiles N.V. family of companies, has made the announcement of investing more than $30 million at its Chelsea Proving Grounds (“CPG”) in southeast Michigan. The aim of the company is to go ahead with the development and testing of autonomous vehicles, and safety technologies.
Through this enhancement of advanced safety technologies, FCA US will be able to offer various features required by the customers across its brand portfolio in a better way. This will also aid the company in effectively rolling out the five-year strategy announced by the company earlier this year.
This new facility, which is likely to start testing programs this month only, includes an autonomous highway-speed track, safety-feature evaluation area of 35 acres and a high-tech command center. Notably, the command center contains over 6,500 square feet and features computer equipment, crucial to GPS capability and test vehicle communication. The new facility will aid in testing various levels of autonomy and equip the company to assess FCA vehicles, using test protocols from third parties.
Fiat Chrysler currently carries a Zacks Rank #3.
5. Harley-Davidson, Inc. (HOG - Free Report) will set up a research and development (R&D) facility in the Silicon Valley of northern California. The new facility will support Harley-Davidson to develop its product portfolio, including the entire range of electric vehicles.
Expected to open in fourth-quarter 2018, this northern Californian hub will serve as a satellite for the company’s Willie G. Davidson product development facility at Wauwatosa, WI. Initially, the factory will focus on the research and development of components, and design related to electric motorcycles. Harley-Davidson’s first no-clutch electric motorcycle, LiveWire, will be launched in 2019. This will be followed by additional models in the same portfolio through 2022.
For the longer term, the center will focus to develop advanced technologies to widen its product offering, with a comprehensive and competitive lineup of motorcycles within the broad spectrum of the price range, riding styles, and power sources.
Harley-Davidson currently carries a Zacks Rank #3.
Performance
Last week, Advance Auto Parts, Inc. (AAP - Free Report) has witnessed the maximum gain, while the highest decline has been witnessed by Tesla, Inc. (TSLA - Free Report) .
In the past six months, Advance Auto Parts has increased the most. Honda Motor Co., Ltd. (HMC - Free Report) has declined the most.
Company
Last Week
Last 6 Months
GM
-4.9%
-6.5%
F
-4.8%
-10.7%
TSLA
-8%
-15.5%
TM
-5.5%
-7.2%
HMC
-6.1%
-17.5%
HOG
1.9%
0.3%
AAP
2.1%
43.1%
AZO
0.3%
17.6%
What’s Next in the Auto Space?
Watch out for the usual news releases over the next week.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Auto Stock Roundup: SUV Sales Up in August, Toyota Faces Recall Mess
Past week witnessed the leading automakers releasing August sales figures. The shift toward roomier sports utility vehicles (SUVs) in place of passenger cars has again been vindicated in the latest sales figures. Overall, a small increase in August sales has been built around strong rise in SUV sales, robust consumer confidence and low level of unemployment. Uncertainty associated with trade policy, rising interest rates and fuel prices acted as deterrents to auto sales.
On the other hand, news pertaining to electric vehicles hogged the limelight in the past week. Per Wall Street Journal, General Motors Company’s (GM - Free Report) plans to produce additional electric vehicles in China have received a setback. This auto giant has been embroiled into trouble as the batteries made in China failed in meeting the performance and safety standards at the time of testing.
On the contrary, Daimler AG’s Mercedes-Benz has unveiled its first fully-electric crossover SUV, EQC, in Stockholm. The company’s new all-electric vehicle will compete with top-spot vehicles by other automakers within the electric vehicles category.
In another event, Japanese auto giant Toyota Motor Corporation (TM - Free Report) has been embroiled in a recall issue. The company announced a global recall of more than 1 million of its Prius and C-HR compact crossover cars, per Bloomberg. The affected vehicles have the risk of catching fire.
(Read the previous roundup here: Auto Stock Roundup for Aug 30, 2018)
Recap of the Week’s Most Important Stories
1. General Motors’ plans to produce additional electric vehicles (EVs) in China have received a jolt, per Wall Street Journal. This auto giant has been embroiled into trouble as the batteries made in China failed in meeting the performance and safety standards at the time of testing.
Notably, in June this year, General Motors disclosed plans to deliver 10 new EV models in China by 2020. This auto giant has also announced that between 2021 and 2023, it is going to raise the number of EV models to 20 in China. In fact, the company has already launched Cadillac CT6 Plug-In, Buick Velite 5 extended-range EV and Baojun E100 EV in China. But, per Wall Street Journal, the company’s plans to launch the Velite 6 plug-in hybrid EV in China have been impacted due to battery problems.
China is playing a pivotal role in the transition toward zero emissions future. Like many other automakers, General Motors has also been actively involved in this transition process. This Detroit, MI-based automaker is going to continue expanding its EV portfolio in the mainland and it has stated that the battery issue is not likely to have much impact on its EV building plans in China. (Read more: General Motors' EV Plan in China Shifts to Low Gear)
General Motors currently carries a Zacks Rank #5 (Strong Sell).
2. Daimler Mercedes-Benz has unveiled its first fully-electric crossover sports utility vehicle, EQC, in Stockholm. The company’s new all-electric vehicle will compete with other top-spot vehicles by other automakers within the EV category.
As a battery-powered vehicle, the model has a driving range of more than 450 km, with two electric motors in the front and rear axles that will offer a combined output of 300 kW. Further, its flawless and clear design embodies a progressive luxury car. These features will attract luxury and technologically proficient customers.
This is in sync with Daimler’s target of launching up to 10 variants of EVs by 2022. Per management, the company expects EQC and its other EV variants to contribute 15-20% to sales in 2025. Further, its planned introduction of 10 EVs will be able to support almost 60% of the EV market. (Read more: Daimler's Mercedes-Benz Introduces First Electric SUV)
Daimler currently carries a Zacks Rank #5.
3. Toyota announces a global recall of more than 1 million of its Prius and C-HR compact crossover cars, per Bloomberg. The affected vehicles have the risk of catching fire.
Out of the 1.03 million recalled vehicles, 192,000 are from the United States and 554,000 are from Japan. This affects the latest Prius model, which includes a plug-in variant, whose production has been initiated in 2015. The current generation of hybrid C-HR, manufactured until May 2018, has also been recalled.
The affected vehicle’s engine wire harness, which is linked to the power control unit, may damage over time that can lead to a short circuit or fire. Per management, one case of smoke emission from a car has been reported without any injuries. (Read more: Toyota Recalls 1M Prius & C-HR Units Over Wiring Issue)
Toyota currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
4. FCA US, a member of Fiat Chrysler Automobiles N.V. family of companies, has made the announcement of investing more than $30 million at its Chelsea Proving Grounds (“CPG”) in southeast Michigan. The aim of the company is to go ahead with the development and testing of autonomous vehicles, and safety technologies.
Through this enhancement of advanced safety technologies, FCA US will be able to offer various features required by the customers across its brand portfolio in a better way. This will also aid the company in effectively rolling out the five-year strategy announced by the company earlier this year.
This new facility, which is likely to start testing programs this month only, includes an autonomous highway-speed track, safety-feature evaluation area of 35 acres and a high-tech command center. Notably, the command center contains over 6,500 square feet and features computer equipment, crucial to GPS capability and test vehicle communication. The new facility will aid in testing various levels of autonomy and equip the company to assess FCA vehicles, using test protocols from third parties.
Fiat Chrysler currently carries a Zacks Rank #3.
5. Harley-Davidson, Inc. (HOG - Free Report) will set up a research and development (R&D) facility in the Silicon Valley of northern California. The new facility will support Harley-Davidson to develop its product portfolio, including the entire range of electric vehicles.
Expected to open in fourth-quarter 2018, this northern Californian hub will serve as a satellite for the company’s Willie G. Davidson product development facility at Wauwatosa, WI. Initially, the factory will focus on the research and development of components, and design related to electric motorcycles. Harley-Davidson’s first no-clutch electric motorcycle, LiveWire, will be launched in 2019. This will be followed by additional models in the same portfolio through 2022.
For the longer term, the center will focus to develop advanced technologies to widen its product offering, with a comprehensive and competitive lineup of motorcycles within the broad spectrum of the price range, riding styles, and power sources.
Harley-Davidson currently carries a Zacks Rank #3.
Performance
Last week, Advance Auto Parts, Inc. (AAP - Free Report) has witnessed the maximum gain, while the highest decline has been witnessed by Tesla, Inc. (TSLA - Free Report) .
In the past six months, Advance Auto Parts has increased the most. Honda Motor Co., Ltd. (HMC - Free Report) has declined the most.
What’s Next in the Auto Space?
Watch out for the usual news releases over the next week.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>