Auto Stock Roundup: September Sales Rebound, EV Race Continues, Tesla Misses Production Goals
Zacks Investment Research | Oct 05, 2017 02:22AM ET
Big automakers were busy last week in building an all-electric future. Many automakers are gearing up for electric vehicles (EVs). In order to respond to stringent emissions’ norms and the proposals made by many countries to ban internal combustion engines powered with fossil fuels, many automakers were seen gearing up for electric vehicles. But the new technology has yet to give any hint on how to generate profits — the key to the survival of any business entity.
Amid this enthusiasm surrounding EVs, U.S. auto sales figures for the month of September were released. Interestingly, auto sales bounced back in September, following a prolonged year-over-year slide. Robust truck and SUV sales and replacement of cars destroyed by Hurricane Harvey in Texas played a major role this rebound.
Per Autodata Corp., U.S. sales increased 6.1% year over year to 1.5 million vehicles. General Motors Co. (NYSE:GM) , Ford Motor Co. (NYSE:F) , Toyota Motor Corp. (NYSE:TM) , Volkswagen (DE:VOWG_p) AG (OTC:VLKAY) , Honda Motor Co., Ltd. (NYSE:HMC) and Nissan’s performance improved during the month. However, Hyundai and Fiat Chrysler reported decline in U.S. sales.
Recap of the Week’s Most Important Stories
1. Per a Wall Street Journal report, Toyota is going to start a new venture with Mazda Motor Corp to develop electric vehicles. This move is in sync with the new strategy adopted by carmakers to increase focus on electrified vehicles.
The venture, EV Common Architecture Spirit Co., is the latest alliance between Toyota and Mazda. While Toyota will hold 90% interest in the new venture, Mazda and Denso Corp., Toyota’s biggest supplier, will hold a 5% stake each. The new venture will develop technology for different types of electric vehicles, including passenger cars, mini-vehicles, SUVs and light trucks.
Toyota will provide most of the financial requirements and EV knowhow. Mazda, on the other hand, will support with its advanced technologies such as compression ignition engine (read more: the complete list of today’s Zacks #1 Rank stocks here .
2. In its bid to recover from the emissions cheating scandal, Volkswagen has planned to offer two new models every year, catering to the U.S. market in the foreseeable future, per an Associated Press report. In order to entice new customers, the German automaker also intends to double the length of warranties.
Volkswagen is encountering emissions-related problems. The automaker agreed to pay over $20 billion in fines and civil settlements related to the scandal. However, per Autodata Corp, so far this year, Volkswagen brand’s sales in the United States increased 6.4%, while the U.S. market was down 2.7%.
This rise in sales in the United States can be attributed to the launch of two new SUVs. Also, the automaker has plans of introducing a new Jetta compact car and a new midsize luxury car for the 2019 model year.
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Recently, the German auto major announced that it will also be investing more than 20 billion euros ($24 billion) in zero-emission vehicles by 2030 to create mass market. The company plans to offer 80 new electric cars across its different groups by 2025, up from its earlier goal of 30 (read more: Ford Sets up Team Edison to Develop Electric Vehicles ).
Currently, Ford carries a Zacks Rank #3.
Performance
In the last week, steepest increase was registered by General Motors and sharpest decline was witnessed by Advance Auto Parts (NYSE:AAP) .
In fact, in the last six months, the steepest increase and the sharpest decline too were witnessed by General Motors and Advance Auto Parts, respectively.
| Company | Last Week | Last 6 Months |
| GM | 7.9% | 28.2% |
| F | 2.8% | 9.1% |
| TSLA | 4.5% | 18.9% |
| TM | 1.1% | 14.7% |
| HMC | 1.2% | 4.7% |
| HOG | -0.8% | -19.8% |
| AAP | -4.6% | -33.4% |
| AZO | 1.4% | -15.3% |
What’s Next in the Auto Space?
Stay tuned for the usual news updates in the space.
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