Auto Stocks: Honda, Ford, GM, Toyota, BMW, Tesla
Zacks Investment Research | Nov 27, 2014 11:53PM ET
Last week was slow in terms of news and stock movement for the auto industry. The only significant news was Honda Motor Company Ltd (NYSE:HMC) acceptance of failure to inform regulators about injuries and deaths in car crashes, which may lead to a hefty fine. Among other developments, Tesla Motors Inc (NASDAQ:TSLA) indicated the possibility of a deal with Bay.Motoren Werke AG ST (XETRA:BMWG), while Toyota Motor Corp Ltd Ord (NYSE:TM) announced another recall.
Meanwhile, the National Highway Traffic Safety Administration (‘NHTSA’) closed separate safety investigations related to General Motors Co.. (GM) and Ford Motor Company (NYSE:F) without pressing for a recall.
(Read last to last week’s recap here: Auto Stock Roundup for Nov 21, 2014 )
Recap of the Week’s Most Important Stories
1. Honda Motor accepted that it had failed to inform U.S. regulators about 1,729 claims of injuries and casualties related to crashes in its vehicles since 2003. The error occurred due to some data entry mistakes and computer programming glitches, along with incorrect interpretation of reporting requirements. If it is found that the automaker violated the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, Honda may be fined around $35 million.
2. Tesla Motors, Inc. is planning to collaborate with BMW on batteries and lightweight components, per media reports. The CEO of Tesla is also considering a tie-up with BMW on charging stations. However, these plans are in the initial stage at present. (Read more: Tesla, BMW to Team Up on Batteries, Lightweight Parts?)
3. Ford Motor Co. has been cleared in an investigation by the NHTSA related to rusting of the heat shield of some of its vehicles. According to the 18 complaints received by the agency, the rusting could dislocate the heat shield and jam the steering shaft. However, NHTSA’s investigation revealed that the rusting was very rare. Consequently, the investigation has been closed without asking for a recall. (Read more: Ford Investigation Closed by NHTSA, No Recall Requested .)
4. General Motors Company has been cleared in an investigation by the NHTSA related to reports of inadvertent braking in some vehicles. The investigation, covering 106,000 Chevrolet Impala vehicles of model year 2014, was started in April after getting 2 reports of autonomous braking which resulted in crashes. However, the probe revealed that the drivers of both vehicles had accidentally turned on the electronic parking brake of the cars. Moreover, no mechanical or electrical problem was found by General Motors in the parking brake switches of the vehicles. Hence, the NHTSA investigation has been closed without the demand of any recall. (Read more: General Motors' Investigation for Inadvertent Braking Closed .)
Get The News You Want
5. Toyota Motor Corporation is recalling 423,000 Lexus luxury brand cars in the U.S., per media reports. The recall is being made to fix fuel leaks, which might lead to fire. The Lexus vehicles recalled by Toyota include the Lexus GS of model years 2006 to 2011, Lexus LS of model years 2007 to 2010 and the 2006 to 2011 Lexus IS models. (Read more: Toyota Recalls 423,000 Lexus Cars due to Fuel Leaks .)
Performance
As of Nov 26, 204, share price of most auto stocks remained close to the week-ago level. Ford and Toyota recorded the maximum gains of merely 1.1% in the last five trading sessions, while the biggest loser, Harley-Davidson, Inc. (Analyst Report ) also lost as little as 1.3%.
Meanwhile, in the last six months, Honda lost the most while Advance Auto Parts Inc (NYSE:AAP) was the top gainer.
What’s Next in the Auto Space?
On Dec 2, automakers will report their U.S. sales data for November. High sales expectations for Black Friday should translate into strong monthly sales data, thereby driving stock prices.
On Dec 1, Ford will pay a quarterly cash dividend of 12.5 cents per share to shareholders of record on Oct 31. Penske Automotive Group will also pay a quarterly cash dividend of 21 cents per share on the same day, to shareholders of record on Nov 10.
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