Several positive developments were seen in the auto sector over the last week, although the performance of auto stocks remained mixed. Among the noteworthy developments, Toyota Motor Corporation TM announced plans to offer automatic emergency braking (AEB) as a standard feature on most of its new vehicles in the U.S. by the end of next year, while AutoZone, Inc. AZO increased its share repurchase program. Further, Ford Motor Co. F and Honda Motor Co., Ltd. HMC announced new investments in their plants, while Thor Industries Inc. THO purchased a new production facility in Indiana.
(Read the previous roundup here: Auto Stock Roundup for Mar 17, 2016)
Recap of the Week’s Most Important Stories
1. Toyota has decided to offer AEB as a standard feature on the majority of new Toyota and Lexus vehicles in the U.S. by the end of next year. This will ensure that the automaker achieves the 2022 industry target set by the National Highway Traffic Safety Administration (NHTSA) and Insurance Institute for Highway Safety (IIHS) four years in advance. Toyota will achieve this goal by adding the Lexus Safety System + and Toyota Safety Sense packages on most new models and trim levels by 2017 end. Per the automaker, 25 out of 30 Lexus and Toyota models will offer the packages as a standard feature by then (read more:Toyota to Make Automatic Braking a Standard Feature by 2017).
2. Ford plans to invest up to €200 million (approximately $223.89 million) in its Craiova Assembly Plant in Romania to equip it for the production of the EcoSport SUV. The manufacture of this vehicle is expected to start at the plant in autumn 2017. Currently, EcoSport is imported in Europe from Ford’s Chennai Vehicle Assembly Plant, which will continue producing the vehicle along with the Craiova Assembly Plant.
3. Honda announced that it will invest $52 million in its plant – Honda Manufacturing of Indiana, LLC (HMIN). This investment will increase the plant’s manufacturing flexibility and production capacity. It will also support the production of the Honda CR-V compact SUV from early 2017.
4. AutoZone’s board of directors increased the company’s share repurchase authorization by $750 million. Including this, the company’s board has authorized a total of $17.2 billion for buying back shares since 1998.
5. Thor Industries announced that it has purchased a production facility in Bristol, IN to boost the manufacturing capacity of its subsidiary, Thor Motor Coach. The 128,000-square-foot facility is located within a few miles of Thor Motor Coach’s main Elkhart production complex. The company will use the acquired facility to build a dedicated production line for its Quantum Class C motorhome line. This will help in meeting demand for this product line while freeing up capacity at the Elkhart production complex to manufacture other Class C motorhome lines (read more: Thor Industries Acquires Production Facility in Indiana).
Performance
The performance of auto stocks was mixed over the last week. AutoZone recorded the maximum gain, driven by the increase in share repurchase authorization. It was also was the largest gainer over the longer term.
Meanwhile, Ford was the week’s biggest loser among the stocks listed below. Tesla Motors, Inc. TSLA was the biggest loser over the last six months.
|
Company |
Last 1-Week Period |
Last 6 Months |
|
GM |
-1.2% |
+6.4% |
|
F |
-1.8% |
-2.9% |
|
TSLA |
+0.3% |
-15.4% |
|
TM |
+0.5% |
-8.0% |
|
HMC |
-1.3% |
-11.9% |
|
HOG |
-0.4% |
-9.5% |
|
AAP |
+1.3% |
-7.8% |
|
AZO |
+1.6% |
+7.9% |
What’s Next in the Auto Space?
Later today, Winnebago Industries, Inc. WGO will report its financial results for the second quarter of fiscal 2016 (ended Feb 27, 2016).
On Mar 31, 2016, Tesla will unveil the highly awaited Model 3. The company will also start taking reservations for the vehicle on the same day, although deliveries are expected to begin by the end of 2017.
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