November auto sales and safety recalls ruled the headlines in the auto industry last week. The Black Friday weekend provided positive momentum to the U.S. auto sales, driving up stock prices as well.
However, the Takata airbag safety issue continued to worry automakers and consumers alike, forcing Ford Motor Co. (F), Toyota Motor Corp. (TM), Honda Motor Co., Ltd. (HMC) and Chrysler to announce further recalls. Meanwhile, Honda launched a new hybrid sedan in Japan and General Motors Co. (GM) reported record high China sales for November.
(Read last to last week’s recap here: Auto Stock Roundup for Nov 27, 2014)
Recap of the Week’s Most Important Stories
1. Attractive Black Friday deals, rising wages and household wealth, improving job security and falling gas prices boosted the U.S. light-vehicle sales by 5% year over year to 1.3 million units in Nov 2014. Sales on a seasonally adjusted annualized rate (“SAAR”) basis amounted to 17.2 million units against 16.3 million in Nov 2013 and 16.5 million in Oct 2014.
Strong light truck sales accounted for most of the improvement, even as car sales inched down. Chrysler, General Motors, Toyota and Honda reported sales growth, while Nissan Motor Co. Ltd. and Ford suffered slight declines (read more: Black Friday Deals Drive November U.S. Auto Sales).
2. Japan-based Takata Corp. placed the burden of recalls on automakers’ shoulders as it refused to announce a recall of its defective airbags, as requested by the U.S. government. As a result, Ford, Toyota, Honda and Chrysler individually announced additional recalls this week for vehicles with the defective Takata-made airbags. These recalls come in addition to the millions of vehicles already recalled by the above automakers and several others owing to the defective airbags.
According to media reports, the tally currently stands at around 8 million vehicles in the U.S. and 14 million globally since 2008. Honda and Toyota are also calling for a coordinated effort in the auto industry to test and identify all airbag inflators that need to be replaced.
3. General Motors and its Chinese joint ventures recorded a 5.3% year-over-year increase in sales in the nation to 310,094 vehicles in Nov 2014. The record high results helped the automaker surpass last year’s total sales in 11 months only.
4. Thor Industries Inc. (THO) reported first-quarter 2015 (ended Oct 31, 2014) adjusted earnings of 73 cents per share, missing the Zacks Consensus Estimate of 81 cents. Earnings increased 7% from 68 cents per share earned in the first quarter of fiscal 2014.
Revenues rose 15% year over year to $922 million, beating the Zacks Consensus Estimate of $898 million. The increase was backed by double-digit sales growth of both towable and motorized recreational vehicles (read more: Thor Industries Misses Q1 Earnings Despite Revenue Beat).
5. Honda announced that it has started marketing the all-new Grace Hybrid sedan in Japan. The new Grace features Honda’s SPORT HYBRID intelligent Dual Clutch Drive (i-DCD), which includes a 1.5L Atkinson cycle DOHC i-VTEC engine, 7-speed DCT with built-in high-output motor and the intelligent power unit with a built-in lithium-ion battery (read more: Honda Motor Selling Grace Hybrid Sedan in Japan).
Performance
As expected, strong U.S. auto sales pulled up most auto stocks over the last one-week period. Tesla Motors, Inc. (TSLA) was the only major auto stock to lose share price during the period. Meanwhile, General Motors and Toyota recorded the maximum gains of 4.9%.
Meanwhile, in the last six months, Honda lost the most, while Advance Auto Parts Inc. (AAP) emerged as the top gainer.
|
Company |
Last 1-Week Period |
Last 6 Months |
|
GM |
+4.9% |
-7.9% |
|
F |
+2.6% |
-4.7% |
|
TSLA |
-7.7% |
+12.4% |
|
TM |
+4.9% |
+11.6% |
|
HMC |
0.0% |
-11.2% |
|
HOG |
+1.2% |
-3.1% |
|
AAP |
+4.3% |
+20.2% |
|
AZO |
+3.9% |
+9.1% |
What’s Next in the Auto Space?
On Dec 9, AutoZone, Inc. will report first-quarter results.
Following General Motors, other automakers are expected to report their monthly sales for China in the coming week. Europe sales figures for October should also come out in the weeks ahead.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment