A broad rally in auto supplier stocks isn't a shocker after positive news piled in from across the globe. In Europe, a long slide in sales has finally reversed while China is opening up the western part of its territory for manufacturers. Just to top it off quite nicely, consumer sentiment rose briskly in the U.S. Advancers: American Axle (AXL) +4.5%, Dana Holding (DAN) +4.1%, TRW Automotive (TRW) +2.2%, Navistar (NAV) +4.4%, Federal-Mogul (FDML) +4.2%, Magna International +1.9%, Meritor (MTOR) +2%, Johnson Controls (JCI) +1.9%, Exide Technologies (XIDE) +5.5%.
The Big Three (F, GM, FIATY.PK) all posted double-digit Y/Y April U.S. sales numbers and topped estimates, but is the best still to come? A fresh slate of models is just hitting dealerships and industry insiders say pent-up demand in the U.S. is barely getting tapped. Though costs in Europe are still a major concern, auto stocks (CARZ, VROM) are becoming enticing on U.S. strength and with China looking wide open as local joint ventures start to pay off.
Automobile stocks (CARZ, VROM) hit a higher gear with a positive report on sales in China and ongoing enthusiasm over sales stateside helping to tip sentiment. Advancers: Toyota (TM) +3.6%, General Motors (GM) +3.1%, Honda (HMC) +2.7%, Tesla Motors (TSLA) +3.2%.
The strong results from AutoNation (AN) could be enough to edge forecasts from analysts on industry-wide vehicle sales even higher. The consensus forecast currently calls for 14M-14.5M vehicles, but automakers have been trimming their summer shutdowns in the U.S. as demand stays strong.
Automobile sales for June are coming in above expectations (Ford, GM, Toyota, Chrysler) and are strong enough that analysts are comfortably raising their annual industry-wide sales forecast to over 14M vehicles. For comparison, last year the industry turned over 12.8M vehicles and in the midst of financial chaos in 2009 only 10.4M cars were sold. Despite the solid numbers, economists are wary that sales could be related to a demand shock from an aging U.S. consumer fleet, instead of any general improvement in consumer confidence.
Forecasts for auto sales keep trickling higher, with estimates now ranging as high as 14M-14.6M after starting the year in a tighter 13.4M-13.7M range. Driving sales higher on unleashed pent-up demand is a slowly-improving economy combined with the increasing age of U.S. cars and trucks on the road. Automakers plan to ramp up production in response, with Chrysler (FIATY.PK) and Ford (F +0.9%) shortening their summer shutdown, while Honda (HMC +1.0%) adds overtime shifts.
Google's self-driving cars will soon be hitting the roads of Nevada after landing state approval. Officials say the concept isn't science fiction, but part of the road map for the future to improve safety. A step behind Google in development: GM, BMW (BAMXY.PK), and Audi (VLKAY.PK).
Automobile manufacturers face a mysterious dalliance by Google with the industry as the search giant remains committed to helping develop technology to create self-driving cars. While a Googlemobile is not on the radar, companies such as GM, BMW (BAMXY.PK), and Audi (VLKAY.PK) plan to move ahead with development to stay a step ahead. Working against the concept: Tough government regulators and drivers who still remember the Blue Screen of Death that showed the infallibility of software quite regularly.
Ford lifts its seasonally adjusted rate of auto sales to a range of 14.5M-15M from a previous level of 13.5M-14.5M. The upward revision follows yesterday's strong (sans GM) reports on March sales from manufacturers. Sector-play ETFs VROM and CARZ are both up over 20% YTD after a couple of years in the doldrums.
Honda (HMC +0.1%) and Subaru (SBUOF.PK) could be set to see profits based on analysis by Edmunds.com on the level of discounting from MSRP that automakers are offering in order to boost sales. By category the lowest incentives were offered on Honda Insights (compact), Subaru Outbacks (midsize), Honda CR-Vs (cross-over SUVs), Subaru Tribecas (midsize cross-over SUVs), and Volvo C30s (entry level luxury).
All of a sudden building auto assembly plants in the U.S. is all the rage with not only the Big 3 American automakers planning to ramp up operations - but also foreign companies. It's a combination of factors that includes stronger market demand, a formidable yen, and the effects of natural disasters in Japan and Thailand that has companies such as GM, F, FIATY.PK, BAMXY.PK, VLKAY.PK, and DDAIF.PK mapping out a strategy to assemble more cars in the U.S.
Experian claims the automotive loan market is in good shape with rates on new and used vehicles at their lowest levels since 2008 and more lenders willing to extend loans to 6 or 7 years. The company also says delinquencies on 30-day and 60-day loans fell off markedly in Q4 compared to last year.
The auto industry sits better prepared for $5 per gallon gas prices than last go around, with 17 models now out that deliver at least 40 MPG - compared to just a few 4 years ago. CNBC's Phil LeBeau forecasts that automakers will continue pounding out strong sales, unless prices at the pump hit a critical mass that creates a psychological impact too great to overcome.
The Global X Auto ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the S-Network Global Automotive Index.
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