The auto industry has been plagued with several problems of late. Lower vehicle sales recorded by many automakers can be attributed to soft demand for vehicles by consumers following a lengthy boom phase. In fact, majority of the automakers witnessed decline in sales in February. Automakers’ new stance of offering lower discounts to buyers, stringent credit conditions and a rise in interest rate kept a lid on consumer demand and eventually resulted in a decline in new vehicles sales.

However, the new-found strength in the broader economy, better job results have again provided some edge to the auto companies. Leading rating agency, Moody’s, projects U.S. auto sales to decline less in 2018 than the previous forecast. Automakers are now projected to sell 16.9 million light vehicles in the United States in 2018, up from Moody’s previous forecast of 16.8 million. Overall improvement in the economy partly led to this upward revision.

Besides these possible upsides for the auto companies emanating from the broader economy, there was the usual readiness from the auto companies in the electric vehicles front. Earnings announcements also continued in the past week.

 (Read the previous roundup here: Auto Stock Roundup for Mar 8, 2018)

Recap of the Week’s Most Important Stories

1.    Navistar International Corp.’s adjusted loss was 24 cents per share in first-quarter fiscal 2018 (ended Jan 31, 2018), narrower than the Zacks Consensus Estimate of a loss of 41 cents. In the year-ago period, the company reported the loss of 76 cents per share.

Navistar recorded net loss of $73 million compared with the net loss of $62 million in the prior-year quarter.

Navistar’s revenues increased 15% year over year to $1.91 billion in the reported quarter. However, revenues lagged the Zacks Consensus Estimate of $1.94 billion. This year-over-year improvement was primarily driven by a 24% increase in sales volume of the company’s Class 6-8 vehicles in the United States as well as Canada.

During the quarter, revenues at Navistar’s Truck segment increased to $1.25 billion, a surge of $224 million from the year-ago figure. This improvement primarily occurred on the back of higher volumes in the company’s Core markets, a rise in military sales and the production of GM-branded units manufactured at Springfield, OH plant. This was partly offset by a fall in the Mexico and export truck volumes. The segment recorded a loss of $7 million during the quarter. (Read more: Navistar’s Q1 Earnings Beat Estimates, Revenues Miss)

Navistar carries a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2.    General Motors Company (GM Quick QuoteGM - Free Report) announced that it would increase the production of Chevrolet Bolt electric vehicle (EV) to meet growing demand, per Reuters. Additionally, the carmaker implored the U.S. Congress to rethink about the expansion of the tax credit for EV.

Per management, the U.S. regulators should consider the potential benefits of increased usage of autonomous vehicles while deciding on tax credits. Few of the benefits associated with these vehicles are lower carbon dioxide emission and fuel consumption, among others.

At present, once an automaker achieves a sales target of 200,000 EV units in a year, it no longer remains eligible for a consumer tax credit of up to $7,500 per vehicle. General Motors already sold 160,000 units of full-electric and plug-in vehicles and are anticipated to achieve the limit by the end of this year.

Per the December 2017 tax bill, the government did not remove tax credit on EVs and also did not act on the proposal to raise the limit.

Launched in October 2016, General Motors Chevrolet Bolt was the first EV, available at a price under $40,000, to run over 200 miles on a single charge. In 2017, General Motors sold total 26,000 units of Bolt, though electric-driven vehicles account a fraction of its overall sales figure. (Read more: General Motors to Hike EV Bolt Production to Meet Demand)

General Motors carries a Zacks Rank #2 (Buy).

3.    Toyota Motor Corp.’s (TM Quick QuoteTM - Free Report) technology strategy business unit, Toyota Connected North America announced its collaboration with Avis Budget Group, Inc. As part of the multi-year partnership, 10,000 Toyota vehicles will be provided to one of Avis Budget Group’s brands, Avis Car Rental, to develop its fleet of connected vehicles.

Avis Budget Group provides mobility solutions via a wide-range of Avis and Budget brands. In addition to using Toyota vehicles, it will also employ its proprietary Mobility Services Platform ("MSPF") to craft a flawless rental experience along with superior rental fleet effectiveness for customers.

Per management, the mobility services platform will help Avis Budget Group to get a better visibility of their fleet vehicles through enhanced connectivity and improved control. (Read more: Toyota to Offer MSPF to Avis for Improved Rental Experience)

Toyota carries a Zacks Rank #2.

4.    Volkswagen AG announced that it would invest $25 billion (EUR 20 billion) to ensure ample battery capacity for the production of its EVs. Further, by the end of 2022, the company aims to manufacture its battery-powered EVs in 16 locations worldwide.

At present, Volkswagen produces electric vehicles in three locations and also aims to equip nine additional plants in the next two years. The goal is in sync with its target to sell 3 million electric cars by 2025. Moreover, it plans to offer an electric version of all 300 models by 2030.

Per management, Volkswagen intends to offer the largest fleet of EVs across all brands and regions within few years. To accomplish that, it will introduce nine new vehicles in 2018, out of which three will be fully electric-powered. Further, from 2019, the company hopes to introduce a new EV model every month. (Read more: Volkswagen to Invest $25M for EV Battery Outsourcing)

Toyota carries a Zacks Rank #2.

5.    Ford Motor Company (F Quick QuoteF - Free Report) has made the announcement of recalling around 1.38 million vehicles in North America, per a Reuters news. Concerns over potentially loose steering wheel bolts led to this recalls. It includes 1.3 million vehicles in the United States, 63,000 in Canada and 14,000 in Mexico.

The affected vehicles include 2014-2018 model year Ford Fusion vehicles and 2014-2018 Lincoln MKZ cars built at plants in Michigan and Mexico. The company announced that the faulty steering wheel bolts will be replaced with longer bolt by the dealers.

Importantly, in October 2017, the U.S. National Highway Traffic Safety Administration examined 841,000 Ford vehicles as reports of loose steering wheel bolts surfaced.

The auto giant has further added that it is also recalling 6,000 units of 2013-15 Ford Fusion vehicles in North America. This pertains to potential clutch-plate crack with the risk of catching fire.

Ford carries a Zacks Rank #3.

Performance

Last week, maximum increase was registered by Ford while the sharpest decline was witnessed by Tesla, Inc. (TSLA Quick QuoteTSLA - Free Report) .

In the last six months, the maximum rise was recorded by Advance Auto Parts, Inc. (AAP Quick QuoteAAP - Free Report) while Tesla shares declined the most.

What’s Next in the Auto Space?

Watch out for the earnings releases and other developments in the sector in the coming days.

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