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Automakers in August

News

An Upside for Automakers in August

Shauna O'Brien Sep 04, 2014



Auto Sales Highest Since 2006


For August, sales are up over 5% from last year, partially due to an early Labor Day weekend, which fell at the end of August. For August, this is the best year for sales since 2003.

Despite the upside in total auto sales, the country’s largest auto maker General Motors (GM) was the only major auto maker to report a decline in sales. GM reported a 1.2% dip in sales to 272,423 units, although it sold more total cars than any other auto company in the U.S.

Ford Motor Company (F) reported a 0.4% increase in sales to 222,174 units, its best August in 8 years.

Toyota Motors™ saw a 6.3% upside for August – selling 246,100 units.


Analysts Bullish on Auto Makers


As the economy continues to improve, the long term outlook on some of these automakers could be a positive one. The industry was crushed by the Great Recession, leaving nothing but upside for GM, Ford and Toyota in the last five years.

Ford shares are up over 135% since 2009, as it continues to execute its turnaround strategy.

Toyota is up around 40% since 2009, although its downfall from the recession was much less traumatic than its U.S. peers.

GM is up less than 2% since its stock re-listing in 2011. Although the company has struggled with bad press and sluggish shares, it still holds the largest market share for automakers in the U.S.


What About Tesla?


The company now has a market capitalization of over $35 billion, yet it sold just 20,000 cars globally in 2013.

The expectations for the company are enormous. On Tuesday, TSLA was given another analyst upgrade from Stifel Nicolaus. The upgrade suggested that TSLA’s stock price will rise almost 50% to $400.

While TSLA’s current product offerings are limited to an elite group of buyers, the company plans to manufacturer lower priced vehicles. The company’s innovations have many investors and analysts wondering what its future sales and market share could do to the big-name automakers we know today.


Auto Makers For Mutual Fund Investors


For mutual fund investors seeking exposure to Tesla, the Fidelity Contrafund Inc (FCNTX) is the largest mutual fund holder.

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