Zacks Industry Outlook Highlights: General Motors, Ford Motor, Toyota Motor,
Volkswagen and Tesla
CHICAGO, Oct. 10, 2013
CHICAGO, Oct. 10, 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 Motor Corp. (NYSE:TM-Free Report),
Volkswagen AG (OTC:VLKAY-Free Report) and Tesla (Nasdaq:TSLA-Free Report).
The automobile sector has performed impressively this year, buoyed by economic
recovery and escalating demand in the U.S. and Asia. Auto sales soared to a
remarkable high, driving the automobile stocks higher.
In the first nine months of 2013, General Motors Company (NYSE:GM-Free Report)
was the leading automaker with an 18.0% market share in the U.S., followed by
Ford Motor Co. (NYSE:F-Free Report) with a 16.0% market share. Toyota Motor
Corp. (NYSE:TM-Free Report) had a 14.4% market share. General Motors regained
its top sales position from Toyota, which led the market in 2012 with 9.75
million vehicles sold globally, exceeding General Motors' 9.29 million
vehicles. Germany's Volkswagen AG (OTC:VLKAY-Free Report) came third with 9.07
million vehicles sold in the year.
Zacks Industry Rank – Positive Outlook
The distinctive attributes of the auto industry impelled us to have a
dedicated sector for the industry in our database. 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
At the expanded classification level, the Zacks auto sector is divided into
five industries: 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 Parts.
The current Zacks Industry Rank for Auto-Domestic is #48, Auto-Foreign is #15,
Auto/Truck-Original is #28, Auto/Truck-Replacement is #37, Engines is #15,
Retail/Wholesale Auto/Truck is #30 and Retail/Wholesale-Auto Parts is #77. 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
This implies that the general outlook for all auto-related industries is
positive. 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
Ford plans to triple its line-up in China by introducing 15 models by 2015. In
June, Ford opened a new assembly plant in China in collaboration with
Jiangling Motors Corp. which doubled its production capacity in the country.
General Motors has also decided to boost the annual production capacity in
China to 5 million vehicles and triple its exports from Chinese plants by
2015. In April, the company revealed plans to build four plants in the country
to boost capacity. General Motors and its joint venture partners in China plan
to invest $11 billion in the country by 2016 and launch about 17 new and
upgraded car models as part of their major expansion program.
Last year, General Motors built two plants in China to increase the production
capacity by 20%. With the addition of four new plants, the production capacity
will increase further by 30% and vehicle exports are expected to rise to
300,000 units from 100,000 units projected for this year.
Even Tesla (Nasdaq:TSLA-Free Report) is seeking a share in the lucrative
Chinese market and started the reservation of Model S in the country in
August. Although the car is expected to be popular among the wealthy and
environmentally conscious consumers in China, high tariffs on imported cars
and shortage of charging stations could affect sales.
In 2009, China overtook the U.S. as the biggest auto market in the world by
sales volumes when the Beijing government introduced a stimulus package,
including tax incentives for small cars. China accounted for a third of light
vehicle sales growth in the last five years.
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