The week before the onset of the full-fledged earnings season is usually quiet for the auto sector. Following this pattern, last week was no different. A handful of announcements dominated the headlines. Toyota Motor Corp. TM announced a new plan for its North American manufacturing operations, following a similar announcement by Honda Motor Co., Ltd. HMC.
Meanwhile, General Motors Company GM decided to implement a four-week production halt on the Chevrolet Volt. Ford Motor Co. F announced significant improvement in Europe sales in March and first-quarter 2015. Tata Motors Ltd. TTM also announced higher global wholesales in March but a decline in cumulative wholesales over Apr 2014 to Mar 2015.
(Read last to last week’s recap here: Auto Stock Roundup for Apr 9, 2015)
Recap of the Week’s Most Important Stories
1. Toyota announced a plan to realign its North American manufacturing operations with the Toyota New Global Architecture (“TNGA”) initiative. Under the plan, the company will build a new manufacturing facility in Guanajuato, Mexico. The plant will require an investment of $1 billion and will be used for the production of Toyota Corolla. It will have annual production capacity of 200,000 units.
The plant is expected to start production in 2019, following which Toyota Motor Manufacturing Canada Inc. (“TMMC”) will modify its Cambridge, Ontario North Plant to produce mid-sized, higher-value vehicles instead of the Corollas that are produced now. TMMC will also make investments in the assembly plants in Cambridge and Woodstock, Ontario under the TNGA initiative.
2. General Motors has decided to stop the production of the Chevrolet Volt for four weeks over the June–July period. The decision is aimed at clearing the backlog of unsold vehicles created due to low sales as well as to modify the plant for the production of the 2016 Volt and the new Cadillac CT6. The 2016 model year Volt will be produced from July and should be available at dealerships, September onward (read more: General Motors to Temporarily Halt Chevrolet Volt Production).
3. Ford reported a 14.4% year-over-year increase in sales to 168,400 vehicles in its 20 traditional European markets in Mar 2015. With this, the company’s monthly sales outpaced the industry sales growth of 11.6%. In the first quarter of 2015, Ford’s sales increased 12.5% to 335,100 vehicles. This is the highest first-quarter sales recorded by the company since 2011 (read more: Ford's European Sales Rise 12.5% in Q1, 14.4% in March).
4. Tata Motors’ global wholesales, inclusive of the Jaguar Land Rover, totaled 103,952 vehicles in Mar 2015, 9% higher year over year. Cumulative global wholesales for Apr 2014 to Mar 2015 were 981,920 vehicles, down 3% year over year. Global wholesales of all Tata Motors’ commercial vehicles and the Tata Daewoo range were 38,486 vehicles in Mar 2015, 2% lower than Mar 2014.
However, cumulative commercial vehicles sales from April through March plunged 13% to 377,841. Tata Motors’ global wholesales of all passenger vehicles in March went up 16% to 65,466 units, while cumulative sales from April through March increased 5% to 604,079 units.
5. Honda’s East Liberty Auto Plant has completed the production of 5 million vehicles. The milestone was achieved with the production of a 2016 Acura RDX on Apr 15.
Performance
Performance of auto stocks remained mixed in the last one week. Honda gained the most over the week, while AutoZone, Inc. AZO held tight to its position as the biggest gainer over the last six months. Meanwhile, Tesla Motors, Inc. TSLA was the biggest loser in both the long and short-term periods.
|
Company |
Last 1-Week Period |
Last 6 Months |
|
GM |
+2.2% |
+23.9% |
|
F |
-0.1% |
+14.0% |
|
TSLA |
-1.6% |
-8.7% |
|
TM |
-0.7% |
+26.1% |
|
HMC |
+2.9% |
+13.4% |
|
HOG |
-1.4% |
+8.1% |
|
AAP |
+1.3% |
+13.3% |
|
AZO |
-0.5% |
+37.2% |
What’s Next in the Auto Space?
The auto sector is entering the first-quarter earnings season next week. A number of big earnings releases are lined up for the week, including Harley-Davidson, Inc. and General Motors.
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