Following the excitement of the 2015 North American International Auto Show in the preceding week, events in the auto industry petered out last week in anticipation of the upcoming earnings releases.
Among the major developments, Toyota Motor Corporation (TM) reported 2014 sales data and emerged as the leading automaker as expected. However, the optimism was dimmed by the automaker’s projection of a sales decline in 2015, for the first time in over 15 years.
Ford Motor Co. (F) decided to increase its production in Germany, following an improvement in European sales in 2014, and General Motors Company (GM) decided that it will start selling the Chevrolet Spark EV on the East Coast. However, a Morgan Stanley analyst reduced the target price on Tesla Motors, Inc. (TSLA) yet again despite presenting a favorable long-term outlook.
(Read last to last week’s recap here: Auto Stock Roundup for Jan 15, 2015)
Recap of the Most Important Stories
1. Toyota reported global sales of 10.23 million units in 2014, surpassing Volkswagen and General Motors to become the leading automaker once again after 2012 and 2013. However, the company projected a sales decline of 1% to 10.15 million units this year due to an expected 9% decline in Japanese sales, which would offset a 2% improvement in sales outside Japan. The automaker will adjust its production accordingly.
Toyota plans to produce 10.21 million vehicles globally this year, down 1% over 2014. This is because the 3% production increase to 6.24 million vehicles planned outside Japan would be offset by a likely 6% fall to 3.97 million units in Japan (read more: Toyota: Leading Vehicle Seller in 2014, Expects 1% Fall in 2015).
2. Ford announced that it will increase the production of its top-selling vehicles at the Saarlouis and Cologne assembly plants in Germany to meet increased demand for these vehicles and in anticipation of higher industry sales in the first half of 2015. From February, the automaker will increase the production of the Ford Fiesta, its best-selling vehicle in Europe, by 300 units per day to 1,850 vehicles at the Cologne plant. Also, it will add six extra weekend shifts in January and February at the plant.
In addition, Ford has increased production of Focus, C-MAX and Grand C-MAX by 240 units to 1,770 vehicles per day at the Saarlouis plant, this week onward (read more: Ford to Raise Production of Top-Selling Cars in Germany).
3. General Motors announced that it will start selling Chevrolet Spark EV on the East Coast by introducing it in Maryland from spring. The car is currently sold only in California and Oregon, both on the West Coast.
4. The target price of Tesla has been reduced to $280 from $290 by a Morgan Stanley analyst. The cut is attributed to declining oil prices, weak China sales in the fourth quarter and the impact of foreign exchange rate changes. However, the analyst has optimistic views on the company’s long-term prospects and believes that the recent decline in stock price makes it an attractive purchase.
5. Winnebago Industries, Inc. (WGO) has collaborated with long-term business ally Farm and City Insurance Services to announce a new Winnebago RV Insurance offering. The new product covers every kind of insurance coverage required, from recreational vehicle insurance to personal insurance plans, while traveling by road.
Performance
The small recovery in the market in the last one-week period has helped auto stocks to recover from the recent weakness. Only General Motors and Ford recorded small declines, with the former losing more. Among the gainers of the week, Honda Motor Co., Ltd. (HMC) led with a 2.8% improvement.
Meanwhile, in the last six months, Ford recorded the maximum loss and Advance Auto Parts Inc. (AAP) retained its position as the top gainer.
|
Company |
Last 1-Week Period |
Last 6 Months |
|
GM |
-1.2% |
-10.3% |
|
F |
-0.9% |
-16.0% |
|
TSLA |
+2.0% |
-10.5% |
|
TM |
+2.3% |
+8.0% |
|
HMC |
+2.8% |
-12.3% |
|
HOG |
+0.8% |
+0.9% |
|
AAP |
+1.7% |
+23.5% |
|
AZO |
+0.6% |
+14.5% |
What’s Next in the Auto Space?
Nothing major is scheduled for the next five trading sessions as companies are busy preparing for their earnings announcements. As such, we can witness some pre-earnings movements in stock prices as Ford, Harley-Davidson and Honda have their financial releases slated for the end of next week.
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