Zacks Industry Outlook Highlights: General Motors, Ford Motor, Toyota Motors,
Honda Motor and Nissan Motor
CHICAGO, June 12, 2013
CHICAGO, June 12, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses
the U.S. Automotive, including General Motors Company (NYSE:GM-Free Report),
Ford Motor Co. (NYSE:F-Free Report), Toyota Motors Corp. (NYSE:TM-Free
Report), Honda Motor Co. (NYSE:HMC-Free Report) and Nissan Motor Co.
The auto industry is highly concentrated. The top-10 global automakers account
for roughly 80% of the worldwide production and nearly 90% of total vehicles
sold in the U.S.
In the first five months of 2013, General Motors Company (NYSE:GM-Free Report)
led with a 18.0% market share in the U.S., followed by Ford Motor Co.
(NYSE:F-Free Report) with a 16.4% market share,Toyota Motors Corp.
(NYSE:TM-Free Report) with a 14.2% market share, Chrysler-Fiat with a 11.7%
market share, and Honda Motor Co. (NYSE:HMC-Free Report) and Nissan Motor Co.
(OTC:NSANY-Free Report) at the last spots with 9.5% and 8.1% market shares,
Toyota recaptured the sales crown from General Motors by selling 9.75 million
vehicles globally in 2012, which exceeded GM's sales of 9.29 million vehicles.
Zacks Industry Rank
Given the industry's unique attributes that distinguish it from other
industrial groups, we have a dedicated sector for the industry in our
databases. As such, the automobile sector is one of the 16 Zacks sectors,
unlike the S&P classification where autos are clubbed into the Consumer
Discretionary sector (the S&P has 10 sectors vs. 16 for Zacks).
At the expanded classification level, the Zacks auto sector is into five
industries at the expanded level: Auto-Domestic, Auto-Foreign,
Auto/Truck-Original, Auto/Truck-Replacement, and Engines. The level of
sensitivity and exposure to different stages of the economic cycle vary for
each industry. The sector's retail operations are part of the Zacks Retail
sector in two industries -- one for Automobile/Trucks and the other for Auto
The current Zacks Industry Rank for Auto-Domestic is #117, Auto-Foreign is
#212, Auto/Truck-Original is #108, Auto/Truck-Replacement is #85 and Engines
is #212, Retail/Wholesale Auto/Truck is #65 and Retail/Wholesale-Auto Parts is
#225. As a reference point, the outlook for industries with Zacks Industry
Rank of #88 and lower is 'Positive,' between #89 and #176 is 'Neutral' and
#177 and higher is 'Negative.'
What this means is that the outlook for dealers -- both new and second hand --
is positive, while the rest of the auto-related industries lean neutral to
negative. We rank all the 260 plus industries in the 16 Zacks sectors based on
the earnings outlook and fundamental strength of the constituent companies in
To remain competitive, the automakers will need to design vehicles that will
cater to consumers in both mature and emerging markets while manufacturing
them at low-cost using the most advanced technology.
For example, Ford has undertaken "One Manufacturing" strategy, which aims at
producing multiple models from plants across the world in order to save
production costs and fast adaptation to changes in consumer tastes. The
automaker anticipates producing 4.5 models at each of its plants by 2015, up
from 3.6 models currently.
Further, the automakers are concentrating on offering more optional features
(which will save money on gas), even on the small and less gas-guzzler
vehicles in order to attract buyers. The sale of optional features is helping
them offset lower profit margins for small cars relative to large trucks.
The automakers continue to shift their production facilities from high-cost
regions such as North America and the European Union to lower-cost regions
such as China, India and South America. According to a study by CSM Worldwide,
China and South America together will represent more than 50% of growth in
global light vehicle production in the auto industry from 2008 to 2015.
The role of governments is highly significant. Their energy and environmental
policies will be strongly responsible in molding the auto industry in the
coming years. In late 2011, 13 major automakers, including Ford, GM, Chrysler,
BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota
and Volvo, have signed letters of commitment with the U.S. Government to
upgrade the fuel economy standard of cars and light-duty trucks to 54.5 miles
per gallon (mpg) by 2025.
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