Automakers Report Mixed November Sales, Lower 2018 Guidance

Major automakers across the globe reported mixed vehicles sales figures in November. Per the data provided by Autodata Corp, in November 2017, the seasonally adjusted annualized rate (SAAR) of U.S. car and light truck sales declined to 17.48 million vehicles, from 17.71 million in November 2016. Per a Reuters report, automakers expect stiff competition in December, as they rush to sell more vehicles in the remaining days of the year, for which they are offering huge discounts.

Mixed Show by Automakers

Leading automakers, General Motors Company (NYSE:GM) and Toyota Motor Corporation (NYSE:TM) , reported sales decline of 2.9% and 3%, respectively, in November 2017 from the prior year. The decline can be attributed to reduced fleet sales to businesses, government and rental agencies. For Toyota, despite total sales declining, sale of SUVs, crossovers and pickups moved up. Another, big automaker which witnessed sales decline in November is Fiat Chrysler Automobiles NV (NYSE:F) . The company saw a 4% decline in overall sales.

On the other hand, Ford Motor Co (NYSE:F) registered a 6.7% rise in November sales. The U.S. auto giant’s fleet sales and retail sales increased 26% and 1.3%, respectively, from November 2016. Also, Japanese automaker Honda Motor Co., Ltd. (NYSE:HMC) saw a 8.3% rise in sales. The increase was driven by sales of SUVs and crossovers.

Outlook

National Automobile Dealers Association projects U.S. auto sales in 2017 to drop to 17.1 million in 2017, slightly lower than the 2016 figure. It expects sales to further drop to 16.7 million in 2018. One of the major problems faced by automakers in recent times has been the increasing number of subprime auto loans. Moreover, people’s inclination toward used cars instead of expensive new cars can also be attributed to this lower projection.

Currently, Toyota sports a Zacks Rank #1 (Strong Buy). Toyota has an expected long-term growth rate of 6.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

While Fiat Chrysler carries a Zacks Rank #2 (Buy), General Motors, Ford and Honda carry a Zacks Rank #3 (Hold).

Fiat Chrysler, General Motors, Ford and Honda have an expected long-term growth rate of 19.1%, 9.2%, 10.7% and 3.8%, respectively.

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Ford Motor Company (F): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report

Toyota Motor Corp Ltd Ord (TM): Free Stock Analysis Report

Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis Report

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