Auto Stock Roundup: TM, F, VLKAY Scale EV Move, GM to Reveal Autonomous Vehicles Status

The week once again saw ace automakers across the globe dashing to make a mark in electric vehicles (EV). Toyota Motor Corporation TM has announced that it will sell locally developed electric vehicles (EVs) in China, the largest auto market in the world. Again, Volkswagen AG VLKAY has announced plans of focusing on the production of EVs based on the new modular electric drive kit (MEB).

General Motors Company GM is likely to update investors about its status in the autonomous vehicles technology space later this month. In fact, the U.S. auto giant aims to become a strong competitor in ride-sharing services, which holds huge earnings potential.

(Read the previous roundup here: Auto Stock Roundup for Nov 16, 2017)

Recap of the Week’s Most Important Stories

1. Per a Reuters report, Toyota, the biggest Japanese automaker, has announced that it will sell locally developed EVs in China. This is in sync with the company’s strategy to boost its EV line up and act in accordance with the Chinese EV production and sales regulations.

Notably, China has imposed stringent rules for electric and plug-in hybrid vehicles that will be available in the market from 2019. Moreover, per the new regulations, foreign automakers, which intend to operate in China, will have to tie up with local partners. On the other hand, foreign auto companies are coming up with a bevy of EV deals and new models in order to grab a greater share of the world’s largest auto market. For this, Toyota has entered into a partnership with China FAW Group Corp and Guangzhou Automobile Group.

Besides the development of all-electric vehicles in collaboration with local companies, the Japanese auto giant also has plans of introducing an EV model in China in 2010, which would be designed in Japan.

In fact, global vehicle makers are coming up with new strategies for the Chinese market. German auto behemoth Volkswagen has announced plans of investing more than $12 billion with its partners to make and develop a range of new energy vehicles in China. Also, Ford Motor Company F announced that it will invest $754 million with its partner in China (read more: Toyota Motors to Sell Locally Designed EVs in China).

Currently, Toyota sports a Zacks Rank #1 (Strong Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here.

2. Ford announced that it will invest more than $870 million in its plant in Valencia, Spain. This is in line with the auto giant’s objective of manufacturing its next-generation Ford Kuga medium-sized Sports Utility Vehicle (SUV). Notably, since 2011, the company has invested around $3.5 billion in its Valencia operations.

Good news is that this huge investment of $870 million will help the Valencia’s operations secure productivity improvements and enhance cost efficiency. The hefty investment also shows Ford’s commitment toward this European manufacturing location. Additionally, it will create job opportunities at the site. Currently, the location employs more than 8,000 people across all its operations.

Since 1976, Valencia Vehicle Operations and Engine Plant has manufactured more than 12 million vehicles and 16 million engines. It is also one of Spain’s top automotive exporters. Apart from the medium-sized SUV Kuga, the hub is responsible for the production of Tourneo Connect people-mover, Transit Connect light commercial vehicle models and the full range of Ford’s Mondeo, S-MAX and Galaxy models (read more: Ford to Pump $870M Into Valencia Plant for Kuga Production).

Currently, Ford has a Zacks Rank #3 (Hold).

3. Honda Motor Co., Ltd. HMC has announced that it will recall around 900,000 Odyssey minivans, per Associated Press news. The Japanese vehicle maker took this decision as it feels that at the time of reasonable to heavy braking, the seats in the second row may tilt forward if not properly fastened.

Honda has revealed that 46 cases of minor injuries have been reported pertaining to this recall issue. The recall includes Odyssey minivans from 2011-2017.

In fact, vehicle makers across the globe, including Honda, are being plagued with recalls problems. Earlier in September, Honda Motor agreed to a $605 million legal settlement over faulty Takata air bag inflators, which led to several deaths and injuries. The loss settlement covers up to 16.5 million Honda and Acura vehicles. This time, Honda is preparing a plan to rectify the problem and will notify the vehicle owners about the recall (read more: Honda to Recall 900,000 Odyssey Minivans to Fix Faulty Seats).

Currently, Honda has a Zacks Rank #3.

4. Volkswagen will pump in €22.8 billion ($26.9 billion) for the development of its main car brand over a period of five years. This announcement follows the recently reported investment of €2.4 billion ($2.8 billion) by its commercial-vehicle division, MAN, in its revamped production facilities.

Of the total, €14 billion will be invested in the automaker’s German plants. Also, the company will be developing its Zwickau plant into an e-mobility facility, which will attract an investment of €1 billion. At this plant, the company has plans of focusing on the production of electric vehicles based on the new modular electric drive kit.

The MEB technology will enable the company to offer electric vehicles with rapid charging capabilities, operating capability from 400 to 600 kilometers and package assistance at the price of a similar diesel car (read more: Volkswagen to Invest $27M Over 5 Years in EV Production).

Currently, Volkswagen carries a Zacks Rank #3.

5. Per a CNBC report, General Motors will update its investors on its autonomous vehicles technology status and its aim of emerging a key competitor in ride-sharing services later this month.

Leadership in autonomous technology implies huge earnings potential, as ride-sharing and ride-hailing industries are growing stupendously in the United States. Per the news, General Motors’ autonomous vehicle, Bolt, is being built on a dedicated platform. This could provide huge cost advantages in comparison to its competitors.

Currently, General Motors carries a Zacks Rank #3.

Performance

Company	Last Week	Last 6 Months
GM	4.9%	36.6%
F	1%	9.2%
TSLA	2.1%	2.4%
TM	1.7%	17%
HOG	-1.7%	-11.8%
AAP	-2.9%	-39.6%
AZO	3.8%	-4.1%

Last week, the steepest increase was registered by General Motors and the sharpest decline was witnessed by Advance Auto Parts, Inc. AAP.
In the last six months, the steepest increase and the sharpest decline were witnessed by General Motors and Advance Auto Parts, respectively.

What’s Next in the Auto Space?

Earnings for the quarter ending Sep 30, 2017 is nearing its end. Watch out for the usual news releases of other auto companies over the next week.

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Ford Motor Company (F) : Free Stock Analysis Report
 
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