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The Zacks Analyst Blog Highlights: Toyota, General Motors, Honda and Nissan

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For Immediate Release

Chicago, IL – January 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Toyota (TM - Free Report) , General Motors (GM - Free Report) ,Honda (HMC - Free Report)  and Nissan (NSANY - Free Report) .

Here are highlights from Thursday’s Analyst Blog:

Japan's Big 3 Automakers See U.S. Sales Gain in 2021

U.S. vehicle sales data for 2021 is out and in a historic turn, Japan’s #1 automaker Toyota has dethroned U.S. auto giant General Motors as the top-selling automaker of the nation. Toyota sold 2,332,262 vehicles in the United States in 2021 compared with 2,218,228 units for General Motors. This is indeed a remarkable feat for Toyota as it is the first time that a foreign automaker has outsold a Detroit counterpart in U.S. auto sales for an entire calendar year in the industry’s 120-year history.

How Did TM Manage to Overtake GM?

Quoting the executive analyst for Cox Automotive, Michelle Krebs, “Toyota's success comes from managing tight inventory well all year. It had solid sales in its Toyota brand as well as its luxury brand, Lexus.” She added, “Toyota stockpiled computer chips, which helped it avoid some of the production pitfalls that hit the Detroit Three early in the chip shortage.”

Most of the auto bigwigs were hard hit by semiconductor shortage. This forced them to halt production lines and left them scrambling to secure enough chips for building vehicles.

It was a rough sales year for General Motors due to the chip famine. But not all automakers suffered equally. For instance, Toyota benefited from having built a larger stockpile of chips. Toyota learnt its lesson back in 2011 when the Fukushima earthquake and tsunami knocked out the production of several key components. Since then, as part of a revamp to its business continuity plan, Toyota has been setting aside larger stockpiles of parts.

So, while most of the U.S. auto giants including General Motors were cutting production amid chip deficit, Toyota was able to hold out longer than its peers until it had to finally announce a cutback in manufacturing plants in the fall of 2021.

Will TM Retain Its Crown in 2022?

While Toyota has been credited for navigating through the chip crunch better than many other automakers, it is not taking its current top spot in America too seriously. In fact, senior vice president of Toyota North America, Jack Hollis, has rather downplayed Toyota’s achievement as America’s top-selling automaker in 2021.

Hollis said, “the automaker is grateful for its loyal customers, but being No. 1 is never a focus or priority." He added, “The Japanese automaker does not see it as sustainable that it can retain its U.S. sales lead and has no plans to use the 2021 accomplishment in any kind of advertising”.

Meanwhile, General Motors is rather optimistic about 2022 vehicle sales. GM North America president Steve Carlisle said, “In 2022, we plan to take advantage of the strong economy and anticipated improved semiconductor supplies to grow our sales and share.”

All in all, while Toyota has been successful in weathering supply crunch problems better, the company doesn’t expect its newfound sales title to be a permanent one. Conversely, General Motors, despite being the undisputed sales leader in its home turf since the Great Depression, witnessed a fall in full-year sales; but seems rather confident to bounce back in 2022.

TM, HMC & NSANY’s 2021 U.S. Sales Numbers

Japan’s big three automakers — Toyota, Honda and Nissan — witnessed U.S. sales growth on a year-over-year basis for 2021.

Toyota reported U.S. sales of 2,332,262 vehicles for 2021, up 10.4% year over year. Sales at its namesake and Lexus division grew 10.3% and 10.7%, respectively. Honda’s overall U.S. sales for 2021 totaled 1,466,630 units, up 8.9% year over year. The Honda brand sales edged up 8.2% and Acura sales increased 14.9%. Nissan’s U.S. sales climbed 12.1% year over year for 2021 to 919,086 units.

Electric Sales Jump, Electrification Strides Bang On

Sales of Toyota’s electrified vehicles — hybrids, plug-ins and fuel cells — soared 73.2% to 583,697 units for 2021, accounting for one-quarter of total volume. TM has earmarked more than $13.5 billion for investment in EV battery development and production through 2030, which includes a $3.4-billion outlay in battery technology in the United States.

To cater to the surging demand for clean energy vehicles in the United States, Toyota envisions EVs to account for nearly 70% of U.S. sales by 2030, up from almost 25% currently. The company expects to sell as many as 1.8 million electrified vehicles in the United States by 2030, including the zero-emission models.

Sales of Honda’s electrified vehicles jumped 65.2% year over year to 107,060 units, setting a new annual record. In a bid to keep up with the global EV race, Honda plans to invest $46 billion in research and development initiatives, including electrification, over the next six years. It targets EVs to account for 40% of sales in North America by the decade-end. In North America, Honda will collaborate with General Motors to develop two large-sized EV models.

The Honda Prologue SUV will be the first volume battery-electric vehicle in North America. The company will unveil an all-electric Acura SUV in 2024.

Currently, Nissan has just one EV offering in the market — the  Nissan Leaf hatchback. Sales of the same rose 48.9% year over year to 14,239 units. NSANY plans to invest around $17.6 billion over the next five years to accelerate the electrification of its product lineup. It intends to launch 23 new electrified models by the decade-end, 15 of which would be fully electric.

The auto giant is aiming at a 50% electrification mix for Nissan and Infiniti brands by 2030. Nissan expects EVs to account for nearly 70% of U.S. sales by 2040.

While TM and NSANY currently sport a Zacks Rank #1 (Strong Buy), Honda carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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