The ride last week for the auto industry was smooth save a few bumps on the cost side. Among the key developments, Honda Motor Co., Ltd. (HMC) announced global production and Japanese sales data for 2014, Toyota Motor Corp. (TM) raised the production target for its fuel cell vehicle (FCV), Mirai, over the next couple of years and Penske Automotive Group, Inc. (PAG) acquired a Land Rover dealership in Connecticut.
Meanwhile, Ford Motor Co. (F) announced an $800 million charge for the fourth quarter due to problems with the availability of the Venezuelan currency and General Motors Company (GM) approved the claims of 50 death cases related to its defective ignition switches.
(Read last to last week’s recap here: Auto Stock Roundup for Jan 22, 2015)
Recap of the Most Important Stories
1. Toyota has decided to increase the production of its FCV, Mirai, over the next couple of years to meet the expected increase in demand. The car, which was launched in Japan slightly over a month ago, is gaining popularity. In addition, the automaker will be launching the FCV in the U.S. and Europe by mid-2015. This will generate further demand.
Thus, Toyota has decided to adjust its supply levels to meet the anticipated requirement. The company will increase the production of Mirai to 2,000 units in 2016 from 700 units planned for this year. The production will be increased further to 3,000 units in 2017 (read more: Toyota to Boost Mirai Production to Meet Expected Demand).
2. Ford announced that it will record a one-time pre-tax charge of $800 million for the fourth quarter of 2014, owing to the unavailability of the Venezuelan currency in exchange for dollars, which has limited its parts purchasing ability in the region. This has affected the production rate in Venezuela and will hurt Ford’s net income by $700 million, after deferred tax benefits. Meanwhile, the company affirmed its pre-tax profit guidance of $6 billion for 2014.
3. Penske acquired a Land Rover dealership in Darien, CT. The acquisition should boost annual revenues by nearly $50 million. The company already has Audi, BMW, Honda, Mercedes-Benz and Porsche dealerships in Connecticut.
4. Honda announced that it produced a record 4.5 million vehicles globally in 2014, up 5% over 2013. The increase was driven by a 14% surge in Japanese production to 0.96 million units and a 2.8% increase in production outside Japan to a record high of 3.56 million vehicles.
Aside from Japan, production increase was reported in North America and Asia, while production declined in Europe and other regions. Production in North America, Asia, and China also set records last year. Meanwhile, sales of the Honda brand increased 11.2% in Japan. Exports from Japan plunged 75.1% due to lower exports to all regions.
5. General Motors reported that its approved death claims associated with the faulty ignition switch recall increased to 50 as of Jan 26. Another 67 claims are being processed, while 58 were declared ineligible and 110 were rejected. The deadline for filing claims for compensation will expire this Saturday and General Motors has refused to extend it further.
Performance
In the last one-week period, the performance of auto stocks was mixed. General Motors was the biggest loser with a 3.1% decline, while AutoZone, Inc. (AZO) gained the most.
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 |
-3.1% |
-3.0% |
|
F |
-2.4% |
-17.7% |
|
TSLA |
+1.4% |
-11.4% |
|
TM |
+1.8% |
+8.6% |
|
HMC |
-2.0% |
-15.4% |
|
HOG |
-2.7% |
-1.2% |
|
AAP |
+3.9% |
+29.6% |
|
AZO |
+4.2% |
+19.7% |
What’s Next in the Auto Space?
Many companies in the auto sector including Ford, Harley-Davidson, Honda, General Motors, Toyota and Lear have their financial releases slated over the next five trading sessions. Additionally, automakers are scheduled to report their U.S. sales for January on Feb 3.
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