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Auto Stock Roundup: TSLA's Record Q4 Deliveries, GM's China Sales Slump & More

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U.S. auto sales data for 2019 was released this week, with all major auto companies having reported fourth-quarter and full-year sales numbers. Though auto sales dipped 1.3% year over year, automakers hit the 17-million sales mark for the fifth straight year.

Of the six major American and Japanese automakers, Nissan Motor stood at the bottom of the table, registering a 9.9% decrease in 2019 sales, followed by decline of 3%, 2.3%, 1.8% and 1.4% for Ford, General Motors, Toyota Motors and Fiat Chrysler, respectively. On an encouraging note, Honda Motors saw a modest 0.2% rise in sales. (Read more: U.S. 2019 Auto Sales Hit 17-Million Mark But Decline Y/Y)

Some highlights of the week included Tesla’s record deliveries in fourth-quarter 2019, General Motor’s warning for weak auto sales in China for the current year and Daimler’s issue of recalls for 744,000 Mercedes-Benz vehicles.

(Read the Last Auto Stock Roundup here).

Recap of the Week’s Most Important Stories

1. Tesla (TSLA - Free Report) registered record production and deliveries of 104,891 and 112,000 vehicles, respectively, in fourth-quarter 2019. Notably, the company’s Model S/X and Model 3 reported record production and deliveries in the quarter. The Model S/X division recorded production and delivery volume of 17,933 and 19,450 vehicles, respectively. The Model 3 division registered production of 86,958 vehicles, while 92,550 vehicles were delivered. In 2019, Tesla delivered 367,500 vehicles, reflecting an increase of 50% year over year. The figure was almost in line with the company’s full-year guidance of 360,000 vehicles. (Read more: Tesla Achieves Record Production of 105k Vehicles in Q4)

Tesla currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. General Motors’ (GM - Free Report) vehicle sales in China recorded the biggest-ever decline in 2019 amid a lackluster Chinese economy and U.S.-Sino trade tensions. The company sold 3.09 million vehicles in the country in 2019, reflecting a decline of more than 15% year over year.After witnessing double-digit sales decline in China in 2019, General Motors warned that the China business is likely to face challenges this year as well. (Read more: General Motors' 2019 China Sales Plummet, Headwinds to Stay)

3. Daimler AG (DDAIF - Free Report) announced the recall of 744,000 Mercedes-Benz vehicles in the United States over faulty sunroofs. The company will recall 2001-11 Mercedes-Benz vehicles, covering C-Class, CLK-Class, CLS-Class and E-Class model lines. The bonding between the glass panels and sliding room frame in the affected models might not meet the requirements and lead to the detachment of sunroofs.Per the U.S. National Highway Traffic Safety Administration, the company did not submit all reports and failed to notify owners about some recalls at the right time. Per the terms of the settlement, Daimler will be liable to pay $13 million and faces another $7 million fine if it does not comply with the agreement. (Read more:Daimler to Recall 744K Mercedes-Benz Wheels Over Sunroof Risks)

4. Toyota (TM - Free Report) announced plans to build a prototype city of the future— Woven City — in Japan. It will be built on a 175-acre siteat the base of Mt. Fuji, powered by hydrogen fuel cells. Woven City will function as a living laboratory for autonomous cars, smart homes, artificial intelligence and other technologies. Danish architect Bjarke Ingels has been commissioned to design the Woven City, which is expected to break ground in early 2021.The streets or pathways, as the name suggests, will be weaved together into three different types, each for a specific type of user. These will be used for faster vehicles, a mix of lower speed, personal mobility and pedestrians, and a park-like pedestrian walk. To cut climate-changing emissions from vehicles, autonomous Toyota e-Palettes will be used for transportation and deliveries. (Read more: Toyota to Build 175-Acre Prototype City of the Future in Japan)

5. The Goodyear Tire & Rubber Company (GT - Free Report) recently launched AndGo and Goodyear Ventures at the 2020 Consumer Electronics Show. While the new capital venture fund — Goodyear Ventures — intends to advance future mobility solutions over the next decade with a targeted investment of $100 million, AndGo is designed to be a seamless vehicle servicing platform that integrates predictive software with a trusted service network. (Read more: Goodyear Launches AndGo & Goodyear Ventures at CES 2020)

6. Tenneco Inc. (TEN - Free Report) announced that Co-Chief Executive Officer Brian Kesseler will be taking on the newly consolidated role of CEO. With that, Roger Wood will no longer serve as the Co-CEO and will step down as a board director, effective immediately. Streamlining its leadership structure is part of the company’s broader plan of improving cash flows and margins, along with reducing debt. Also, while management has postponed the DRiV split until mid-2020, it believes that the current end-market conditions are still likely to impact the firm’s ability to complete the planned spinoff within the targeted timeline. Although the company is taking incremental actions to facilitate the planned spinoff of DRiV, volatile industry environment and unfavorable market conditions are acting as deterrents. (Read more: Tenneco Provides Leadership and Restructuring Updates)

Price Performance

Company

Last Week

Last 6 Months

GM

-5.3%

-9%

F

-0.5%

-8.5%

TSLA

17.7%

106%

TM

0.5%

10.8%

HMC

-0.6%

6.6%

HOG

-1.7%

2.5%

AAP

-4.3%

-0.1%

AZO

-3.6%

-2.1%

The following table shows the price movement of some of the major auto players over the past week and six-month period.

In the past week, General Motors has declined the most, while Tesla has been the maximum gainer. Even over the past six months, Tesla has been the best performer, having rallied a whopping 106%, while General Motors and Ford (F - Free Report) has been the worst performing stocks.

What’s Next in the Auto Space?

Next week, CAAM (China Association of Automobile Manufacturers) will announce full-year 2019 auto sales in China, which is the world’s largest automobile market. Watch out for the usual news releases.

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