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Auto Stock Roundup: Harvey Hits Badly, Honda to Launch Electric-Vehicles in 2018
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In an otherwise somber week, Hurricane Harvey gave a severe jolt to many industries, including auto. In fact, Harvey, which devastated the Houston area, home to more than 500 auto dealerships, will have a grave impact on the auto space that is already grappling with challenges.
Notably, Texas is the second-largest auto market in the United States, after California. The Houston metropolitan area is also the leading auto sales market in Texas and the entire Gulf Coast. Several dealerships had to be closed in the aftermath of the hurricane. The storm also damaged numerous trucks and cars parked in the dealership lots. This has prompted some analysts to cut their August vehicles sales estimates.
On the other hand, global automakers continue to expand their network in China, thanks to the increasing urgency of manufacturing electric vehicles. The latest addition to this list is Honda Motor Company (HMC - Free Report) , which has announced its plans of launching two fully electric-vehicles in 2018, of which one will be launched in China and the other in Europe.
1. General Motors Company (GM - Free Report) has shared details of its investment in Brazil. Per a Reuters report, the company has invested $603 million (1.9 billion reais) in its Joinville factory in southern Brazil. The company also announced capital spending of 1.2 billion reais in its plant on the outskirts of Sao Paulo.
Notably, General Motors is raising capacity investment in emerging markets to enhance its global sales. The company expects half of the global sales growth by 2030 to come from emerging markets. The company is trying to gain from growth in emerging countries through product launches and new plants.
Together with a recent announcement related to the southern Gravatai plant, the investments total 4.5 billion reais and a capital spending sums up to 13 billion reais between 2014 and 2020 (read more: General Motors Divulges Investment Details in Brazil).
Currently, General Motors has a Zacks Rank #3 (Hold).
2. Toyota Motor Corporation’s (TM - Free Report) holding company, Toyota Motor North America, announced that it will build a group in order to emphasize the development of user experiences and new technologies. These new, advanced in-car technologies will be added to the Toyota and Lexus vehicles.
The newly built Connected Technologies will consist of roughly 100 positions and will comprise employees from the existing teams of connected vehicles, information systems and research and development. This new group is in sync with the company’s One Toyota structure.
The new unit will comprise Toyota’s planning, development, engineering and performance for connected service and hardware systems to enable it to develop and customize in-car experiences for customers (read more: Toyota Forms a Group to Enhance In-Car User Experiences).
3. Ford Motor Company (F - Free Report) has partnered with Domino’s Pizza to gauge if self-driving automobiles can play a pivotal role in pizza delivery.
Researchers of both the companies will analyze how customers react to this interaction with the self-driving cars as part of food-delivery experiences. The findings will enable both the organizations to get a feel of customers’ viewpoint for future food delivery via self-driving automobiles.
This study will further help Ford in ensuring that the self-driving technology only amplifies customers’ experience. This partnership with Domino’s supports Ford to move toward a business that meets the needs of both the companies as well as their customers (read more: Ford & Domino's to Test Pizza Delivery via Self-Driving Cars).
Currently, Ford has a Zacks Rank #3.
4. BorgWarner Inc. (BWA - Free Report) supplies oil pump chains for Toyota’s newly launched eight-speed automatic transmission. The company supplies 6.35 mm silent oil pump chain for manufacturing new 2.5-liter Camry. Further, the new eight-speed automatic transmission will be used to serve the purpose of a transmission program, to be held next year.
Per Joel Wiegert, president and general manager, BorgWarner Morse Systems, the company is offering locally manufactured oil pump chains for Toyota in the United States. However, prior to this move, the company was already an oil pump chain supplier for Toyota in Japan.
5. Per Business Insider, Honda Motor Company (HMC - Free Report) plans to launch two fully electric-vehicles in 2018, of which one will be launched in China and the other in Europe.
In June, Honda announced the upcoming launch of its electric-vehicle model in China, the world’s largest market for electric vehicles. With the expected number of electric-vehicle sales in China to exceed 4 million by 2025, these launches will help Honda to strengthen its presence in the country.
For the European market, the company will be launching its Urban EV Concept, the first electric-vehicle for its European customers.
These electric vehicle launches are in line with Honda’s Vision 2030 strategy plan, which will have an increased focus on research and development in electric vehicles and self-driving technology. Further, the company also aims to electrify two-third of its automobiles by 2030.
Among these stocks, last week, Advance Auto Parts (AAP - Free Report) registered the maximum increase. On the other hand, Toyota’s share price fell the most.
In the last six months, Tesla in the only stock whose price has risen, while Advance Auto Parts registered the steepest decline.
Company
Last Week
Last 6 Months
GM
0.9%
-5.1%
F
2.1%
-14.6%
TSLA
0.1%
38.9%
TM
-0.5%
-2.3%
HMC
-0.3%
-11%
HOG
0.7%
-19.4%
AAP
3.5%
-39.3%
AZO
3.2%
-29.3%
What’s Next in the Auto Space?
With the earnings season over, stay tuned for the usual news updates in the space.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
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Image: Bigstock
Auto Stock Roundup: Harvey Hits Badly, Honda to Launch Electric-Vehicles in 2018
In an otherwise somber week, Hurricane Harvey gave a severe jolt to many industries, including auto. In fact, Harvey, which devastated the Houston area, home to more than 500 auto dealerships, will have a grave impact on the auto space that is already grappling with challenges.
Notably, Texas is the second-largest auto market in the United States, after California. The Houston metropolitan area is also the leading auto sales market in Texas and the entire Gulf Coast. Several dealerships had to be closed in the aftermath of the hurricane. The storm also damaged numerous trucks and cars parked in the dealership lots. This has prompted some analysts to cut their August vehicles sales estimates.
On the other hand, global automakers continue to expand their network in China, thanks to the increasing urgency of manufacturing electric vehicles. The latest addition to this list is Honda Motor Company (HMC - Free Report) , which has announced its plans of launching two fully electric-vehicles in 2018, of which one will be launched in China and the other in Europe.
(Read the previous roundup here: Auto Stock Roundup for Aug 24, 2017)
Recap of the Week’s Most Important Stories
1. General Motors Company (GM - Free Report) has shared details of its investment in Brazil. Per a Reuters report, the company has invested $603 million (1.9 billion reais) in its Joinville factory in southern Brazil. The company also announced capital spending of 1.2 billion reais in its plant on the outskirts of Sao Paulo.
Notably, General Motors is raising capacity investment in emerging markets to enhance its global sales. The company expects half of the global sales growth by 2030 to come from emerging markets. The company is trying to gain from growth in emerging countries through product launches and new plants.
Together with a recent announcement related to the southern Gravatai plant, the investments total 4.5 billion reais and a capital spending sums up to 13 billion reais between 2014 and 2020 (read more: General Motors Divulges Investment Details in Brazil).
Currently, General Motors has a Zacks Rank #3 (Hold).
2. Toyota Motor Corporation’s (TM - Free Report) holding company, Toyota Motor North America, announced that it will build a group in order to emphasize the development of user experiences and new technologies. These new, advanced in-car technologies will be added to the Toyota and Lexus vehicles.
The newly built Connected Technologies will consist of roughly 100 positions and will comprise employees from the existing teams of connected vehicles, information systems and research and development. This new group is in sync with the company’s One Toyota structure.
The new unit will comprise Toyota’s planning, development, engineering and performance for connected service and hardware systems to enable it to develop and customize in-car experiences for customers (read more: Toyota Forms a Group to Enhance In-Car User Experiences).
Currently, Toyota has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
3. Ford Motor Company (F - Free Report) has partnered with Domino’s Pizza to gauge if self-driving automobiles can play a pivotal role in pizza delivery.
Researchers of both the companies will analyze how customers react to this interaction with the self-driving cars as part of food-delivery experiences. The findings will enable both the organizations to get a feel of customers’ viewpoint for future food delivery via self-driving automobiles.
This study will further help Ford in ensuring that the self-driving technology only amplifies customers’ experience. This partnership with Domino’s supports Ford to move toward a business that meets the needs of both the companies as well as their customers (read more: Ford & Domino's to Test Pizza Delivery via Self-Driving Cars).
Currently, Ford has a Zacks Rank #3.
4. BorgWarner Inc. (BWA - Free Report) supplies oil pump chains for Toyota’s newly launched eight-speed automatic transmission. The company supplies 6.35 mm silent oil pump chain for manufacturing new 2.5-liter Camry. Further, the new eight-speed automatic transmission will be used to serve the purpose of a transmission program, to be held next year.
Per Joel Wiegert, president and general manager, BorgWarner Morse Systems, the company is offering locally manufactured oil pump chains for Toyota in the United States. However, prior to this move, the company was already an oil pump chain supplier for Toyota in Japan.
Good news is that BorgWarner’s continued global expansion has enabled it to start its own oil pump manufacturing facility in the United States (read more: BorgWarner’s Pump Chains Bat for Silent Toyota Transmission).
Currently, BorgWarner has a Zacks Rank #2 (Buy).
5. Per Business Insider, Honda Motor Company (HMC - Free Report) plans to launch two fully electric-vehicles in 2018, of which one will be launched in China and the other in Europe.
In June, Honda announced the upcoming launch of its electric-vehicle model in China, the world’s largest market for electric vehicles. With the expected number of electric-vehicle sales in China to exceed 4 million by 2025, these launches will help Honda to strengthen its presence in the country.
For the European market, the company will be launching its Urban EV Concept, the first electric-vehicle for its European customers.
These electric vehicle launches are in line with Honda’s Vision 2030 strategy plan, which will have an increased focus on research and development in electric vehicles and self-driving technology. Further, the company also aims to electrify two-third of its automobiles by 2030.
Currently, the company sells all-electric Clarity in the U.S. that has a range of 89 miles per charge (read more: Honda to Launch Electric Cars in Europe and China).
Performance
Among these stocks, last week, Advance Auto Parts (AAP - Free Report) registered the maximum increase. On the other hand, Toyota’s share price fell the most.
In the last six months, Tesla in the only stock whose price has risen, while Advance Auto Parts registered the steepest decline.
What’s Next in the Auto Space?
With the earnings season over, stay tuned for the usual news updates in the space.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.
Learn more >>