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Auto Roundup: Group 1 (GPI) & Sonic's (SAH) Expansion Efforts and Other Updates
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The China Association of Automobile Manufacturers (CAAM) released March auto sales data for the world’s largest car market. Per CAAM, vehicle sales in the country declined 11.7% year over year to 2.23 million units amid COVID-related shutdowns, which resulted in manufacturing halts and a slowdown in consumer purchases. For the January-March period, the total vehicle sales in China inched up 0.2% aided by rising year-over-year vehicle sales for the first two months of 2022.
While most of the auto biggies announced first-quarter U.S. vehicle sales data last to last week, U.S. auto giant Ford (F - Free Report) posted the numbers early last week. Deliveries by Ford in March and the first quarter of 2022 declined year over year amid supply chain snafus. Mercedes-Benz Group AG’s U.S. subsidiary, Mercedes-Benz USA, also reported sales data. Japanese auto biggie Toyota (TM - Free Report) cut overall vehicle sales view in the United States for 2022 owing the chip dearth. Meanwhile, auto retailers Sonic Automotive (SAH - Free Report) and Group 1 Automotive (GPI - Free Report) continue to strengthen their portfolio with the opening of a new EchoPark store and the acquisition of a Toyota Dealership, respectively.
Major News of the Week Gone By
Ford announced first-quarter sales of 432,132 vehicles. Sales of the company’s new vehicles in the United States fell 17% for the quarter, led by the ongoing global shortage of semiconductor chips. Sales of Ford’s trucks were down 23% for the first quarter. Car sales declined 49%, while SUV sales were down 5.1% from the prior-year quarter.
In March, Ford sold 159,328 units in March. The overall truck sales were down 34.4%. Sales of cars fell 67% and that of SUVs declined 9.4%. Ford’s most profitable F-Series pickups, including the F-150 and its larger versions, recorded a year-over-year sales plunge of 31% for the first quarter and 47% in March. Nonetheless, March sales jumped slightly from February as in-transit inventory improved 74%, positioning the auto biggie for sales growth in the spring season.
Toyota slashed its outlook for overall new vehicle sales in the United States for 2022 amid exacerbated supply chain snarls due to the Russia-Ukraine war. The company now expects total U.S. sales of 15.5 million units this year, down from its prior view of 16.5 million. If the supply struggles worsen, Toyota expects total U.S. auto sales in the band of 14.9-15 million units. That’s the worse-case scenario. The executive vice president of sales for Toyota North America, Bob Carter, expects the company’s sales in the United States for Lexus and Namesake brands to be 2.35 million units in 2022.
It is to be noted that Toyota sold 514,592 vehicles for the three months ended March 2022. While Toyota’s first-quarter sales fell roughly 15% on a year-over-year basis, electric vehicle (EV) sales witnessed a jump. Toyota’s first-quarter 2022 EV sales totaled 132,938, up 23% year over year. Electrified sales accounted for 25.8% of the total sales volume of the auto biggie. While near-term sales are under pressure, Toyota’s electrification push is a major tailwind for the long term.
Mercedes-Benz U.S. subsidiary, Mercedes-Benz USA, came out with first-quarter 2022 sales report. It recorded sales of 62,251 vehicle models. Additionally, Mercedes-Benz vans garnered sales of 13,688 units, taking the total units sold from Mercedes-Benz USA to 75,939 vehicles for the quarter, reflecting a decline of 15.5% year over year. The company’s wide range of SUVs accounted for 75% of total sales volume for the first quarter. Mercedes-Benz volumes for the GLC, GLE and GLS model lines were 16,910 units, 15,990 units and 6,203 units, respectively.
Sales for Mercedes-AMG high-performance models came in at 6,985 units, plunging 40.2% year over year. Mercedes-Benz Certified Pre-Owned models reported sales of 32,932 vehicles for the first quarter, down 5.9% year over year. Mercedes-Benz has been adversely impacted by the raging chip crisis and the Ukraine conflict.
Sonic announced the opening of its newest retail hub in Raleigh, NC. This expanded its EchoPark Automotive brand. The new facility will be EchoPark's 37th location to date and third in the state, adding to the current Charlotte retail hub and Greensboro delivery center. North Carolina is a vital market for Sonic, and the Raleigh site will further cement its footprint in the state and allow it to cater to the growing demand for pre-owned vehicles across the nation.
The EchoPark unit has been a major growth engine of the firm. The auto retailer witnessed record used vehicle unit sales of 77,835 in 2021, up 36.2% year over year. EchoPark revenues also hit a record high of $2.3 billion in 2021, up 65.3% year over year. Strong organic growth fueled by EchoPark expansion is likely to significantly boost Sonic’s prospects.
Group 1 announced the buyout of Larry H. Miller Toyota dealership in Albuquerque, New Mexico. This dealership marks the 17th Toyota store in the auto retailer’s U.S. portfolio. Group 1 intends to rename the dealership to Sandia Toyota. The new store will add GPI’s existing New Mexico portfolio of 8 franchises including Lexus, BMW, MINI, Land Rover and Jaguar brands. The buyout is anticipated to add $115 million to GPI’s annualized revenues. So far in 2022, Group 1 completed transactions representing $550 billion of acquired revenues.
Group 1 also provided an update on its share buyback activity. Year to date, the auto retailer repurchased 638,696 shares at an average price of $180.30 for $115.2 million, representing roughly 4% of Group 1's outstanding share count at the beginning of the year. Group 1 currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Performance
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
Industry watchers will keep a tab on March passenger vehicle registrations, likely to be released by the European Automobile Manufacturers Association soon. Further, stay tuned for how automakers make changes in operations in the light of increasing supply chain snarls.
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Auto Roundup: Group 1 (GPI) & Sonic's (SAH) Expansion Efforts and Other Updates
The China Association of Automobile Manufacturers (CAAM) released March auto sales data for the world’s largest car market. Per CAAM, vehicle sales in the country declined 11.7% year over year to 2.23 million units amid COVID-related shutdowns, which resulted in manufacturing halts and a slowdown in consumer purchases. For the January-March period, the total vehicle sales in China inched up 0.2% aided by rising year-over-year vehicle sales for the first two months of 2022.
While most of the auto biggies announced first-quarter U.S. vehicle sales data last to last week, U.S. auto giant Ford (F - Free Report) posted the numbers early last week. Deliveries by Ford in March and the first quarter of 2022 declined year over year amid supply chain snafus. Mercedes-Benz Group AG’s U.S. subsidiary, Mercedes-Benz USA, also reported sales data. Japanese auto biggie Toyota (TM - Free Report) cut overall vehicle sales view in the United States for 2022 owing the chip dearth. Meanwhile, auto retailers Sonic Automotive (SAH - Free Report) and Group 1 Automotive (GPI - Free Report) continue to strengthen their portfolio with the opening of a new EchoPark store and the acquisition of a Toyota Dealership, respectively.
Major News of the Week Gone By
Ford announced first-quarter sales of 432,132 vehicles. Sales of the company’s new vehicles in the United States fell 17% for the quarter, led by the ongoing global shortage of semiconductor chips. Sales of Ford’s trucks were down 23% for the first quarter. Car sales declined 49%, while SUV sales were down 5.1% from the prior-year quarter.
In March, Ford sold 159,328 units in March. The overall truck sales were down 34.4%. Sales of cars fell 67% and that of SUVs declined 9.4%. Ford’s most profitable F-Series pickups, including the F-150 and its larger versions, recorded a year-over-year sales plunge of 31% for the first quarter and 47% in March. Nonetheless, March sales jumped slightly from February as in-transit inventory improved 74%, positioning the auto biggie for sales growth in the spring season.
Toyota slashed its outlook for overall new vehicle sales in the United States for 2022 amid exacerbated supply chain snarls due to the Russia-Ukraine war. The company now expects total U.S. sales of 15.5 million units this year, down from its prior view of 16.5 million. If the supply struggles worsen, Toyota expects total U.S. auto sales in the band of 14.9-15 million units. That’s the worse-case scenario. The executive vice president of sales for Toyota North America, Bob Carter, expects the company’s sales in the United States for Lexus and Namesake brands to be 2.35 million units in 2022.
It is to be noted that Toyota sold 514,592 vehicles for the three months ended March 2022. While Toyota’s first-quarter sales fell roughly 15% on a year-over-year basis, electric vehicle (EV) sales witnessed a jump. Toyota’s first-quarter 2022 EV sales totaled 132,938, up 23% year over year. Electrified sales accounted for 25.8% of the total sales volume of the auto biggie. While near-term sales are under pressure, Toyota’s electrification push is a major tailwind for the long term.
Mercedes-Benz U.S. subsidiary, Mercedes-Benz USA, came out with first-quarter 2022 sales report. It recorded sales of 62,251 vehicle models. Additionally, Mercedes-Benz vans garnered sales of 13,688 units, taking the total units sold from Mercedes-Benz USA to 75,939 vehicles for the quarter, reflecting a decline of 15.5% year over year. The company’s wide range of SUVs accounted for 75% of total sales volume for the first quarter. Mercedes-Benz volumes for the GLC, GLE and GLS model lines were 16,910 units, 15,990 units and 6,203 units, respectively.
Sales for Mercedes-AMG high-performance models came in at 6,985 units, plunging 40.2% year over year. Mercedes-Benz Certified Pre-Owned models reported sales of 32,932 vehicles for the first quarter, down 5.9% year over year. Mercedes-Benz has been adversely impacted by the raging chip crisis and the Ukraine conflict.
Sonic announced the opening of its newest retail hub in Raleigh, NC. This expanded its EchoPark Automotive brand. The new facility will be EchoPark's 37th location to date and third in the state, adding to the current Charlotte retail hub and Greensboro delivery center. North Carolina is a vital market for Sonic, and the Raleigh site will further cement its footprint in the state and allow it to cater to the growing demand for pre-owned vehicles across the nation.
The EchoPark unit has been a major growth engine of the firm. The auto retailer witnessed record used vehicle unit sales of 77,835 in 2021, up 36.2% year over year. EchoPark revenues also hit a record high of $2.3 billion in 2021, up 65.3% year over year. Strong organic growth fueled by EchoPark expansion is likely to significantly boost Sonic’s prospects.
Group 1 announced the buyout of Larry H. Miller Toyota dealership in Albuquerque, New Mexico. This dealership marks the 17th Toyota store in the auto retailer’s U.S. portfolio. Group 1 intends to rename the dealership to Sandia Toyota. The new store will add GPI’s existing New Mexico portfolio of 8 franchises including Lexus, BMW, MINI, Land Rover and Jaguar brands. The buyout is anticipated to add $115 million to GPI’s annualized revenues. So far in 2022, Group 1 completed transactions representing $550 billion of acquired revenues.
Group 1 also provided an update on its share buyback activity. Year to date, the auto retailer repurchased 638,696 shares at an average price of $180.30 for $115.2 million, representing roughly 4% of Group 1's outstanding share count at the beginning of the year. Group 1 currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Performance
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
Industry watchers will keep a tab on March passenger vehicle registrations, likely to be released by the European Automobile Manufacturers Association soon. Further, stay tuned for how automakers make changes in operations in the light of increasing supply chain snarls.