The holiday season tends to be slow in terms of business news and the last few weeks of 2014 were no different for the auto industry. In this lull, Tesla Motors, Inc. (TSLA) grabbed the headlines with news of an upgrade for its oldest vehicle, the Roadster.
Some of the other positive developments included the launch of General Motors Company’s (GM) 2016 Cadillac CTS-V and Ford Motor Co.’s (F) collaborations with a few companies to add apps to its SYNC AppLink. The slowdown in safety recalls brought cheer to investors with only a few companies announcing minor recalls. The recent weakness in auto stocks has also eased to an extent as only a couple of stocks recorded losses over the last week.
(Read the previous roundup here: Auto Stock Roundup for Dec 18, 2014)
Recap of the Most Important Stories
1. Tesla announced that it will offer an upgrade to its older Roadster model to Roadster 3.0 from spring 2015. The upgraded vehicle will have a better battery, new tires and other improvements and will offer 40% to 50% better range and mileage compared to its predecessor. The company said that under certain speed and driving conditions, the Roadster 3.0 can travel more than 400 miles on a single charge. The older Roadster travels 245 miles on a single charge (read more: Tesla's Upgraded Roadster to Offer Better Efficiency).
2. General Motors’ Cadillac brand announced the launch of the 2016 CTS-V, which is being claimed to be one of the world’s best performing luxury vehicles. The all new CTS-V features 640 horsepower (477 kW), 630 lb-ft of torque (855 Nm) and boasts a top speed of 200 mph. This new vehicle is capable of offering 0–60 performance in 3.7 seconds (read more: General Motors' Cadillac Launches 2016 CTS-V, Shares Up).
3. Honda Motor Co., Ltd. (HMC) announced that it will recall 1,252 Crosstour vehicles of model year 2015 in the U.S. due to a problem in the side curtain airbags. According to the company, the tubing connected to the side curtain airbag inflators in the recalled vehicles may have a manufacturing defect. As a result of this, one or both the side curtain airbags may not be deployed properly in case of a crash. This increases the risk of injury (read more: Honda to Recall Crosstour for Side Curtain Airbag Issue).
4. Ford and AccuWeather announced that they have joined forces to incorporate one of the country’s leading weather apps – AccuWeather MinuteCast – to the automaker’s in-car connectivity system, Ford SYNC AppLink. The technology will give drivers minute-by-minute forecasts for up to two hours to help them make safer driving decisions during inclement weather. In a separate update Ford announced that the company along with Life360 – the world’s largest family oriented location-sharing network – will enable family members to stay connected while on the road with the help of Drive Mode (read more: Ford Ties Up with AccuWeather & Life360 for SYNC AppLink).
5. Toyota Motor Corp. (TM) executives revealed that the automaker will likely miss its 2014 China sales target due to economic weakness in the country. Toyota had set a target of 1.1 million vehicles in the nation but it has probably sold close to 1 million vehicles. The automaker has nevertheless surpassed the 2013 number of 917,500 vehicles sold.
Performance
Stock price of most of the auto stocks recorded marginal changes in the last one-week period. Tesla, which has been falling recently due to declining oil and gas prices, managed to inch up on the news of the Roadster upgrade and a new software update for dual motor Model S.
General Motors was the only stock to record a significant gain over the past week. Meanwhile, Honda recorded the maximum loss in the last one week as well as six months. Advance Auto Parts Inc. (AAP) remained the top gainer in the past six-month frame.
|
Company |
Last 1-Week Period |
Last 6 Months |
|
GM |
+4.4% |
-7.1% |
|
F |
+1.3% |
-9.9% |
|
TSLA |
+0.1% |
-7.2% |
|
TM |
-1.0% |
+2.6% |
|
HMC |
-2.8% |
-16.2% |
|
HOG |
+0.5% |
-6.3% |
|
AAP |
-0.6% |
+18.4% |
|
AZO |
+0.3% |
+15.3% |
What’s Next in the Auto Space?
Most automakers will release their December and full year sales figures for the U.S. on Jan 5. Additionally, Toyota will release its China sales data on Jan 6. China sales figures from Ford and General Motors should also come out during the week.
Sales in the U.S. have been strong over most of 2014 and upbeat results are expected. However, China sales, which started out exceptionally strong in the beginning of last year lost momentum as the year progressed on a soft economy. As a result, most companies may not be able to attain their targeted figures. However, auto sales in the country should still be significantly higher than 2013 levels. Favorable sales data should pull up auto stocks going forward.
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