27 May

Interesting Times for Automakers and Regulators in 2015

WRITTEN BY Mohit Oberoi, CFA

Automakers having a decent run in 2015

The automobile industry, especially in the United States, is having a decent run as far as sales volumes are concerned. In 2015, US vehicles sales are expected to surpass 17 million units, making it the best year for automakers in a decade.

Interesting Times for Automakers and Regulators in 2015

The above graph shows recent stock market performance for automobile manufacturers. Automakers’ Wall Street performances have been a mixed bag so far in 2015. General Motors (GM) and Ford (F) are having a lackluster year, but Tesla Motors (TSLA) and Fiat Chrysler (FCAU) investors have much to cheer about.


In this series, we’ll be looking at recent developments in the automobile industry. The industry has been hit hard by a series of recalls in the past year. The increased scrutiny comes at a time when automakers are already struggling to meet stringent fuel economy standards.

Ford has taken a lead by converting its F-150 pickup, its best-selling model, into a full aluminum body vehicle. The conversion, which took close to five years, has eliminated close to 700 pounds from the weight of the pickup.

According to Ford, by using aluminum, which is very lightweight compared to steel, it has managed to increase the F-150’s fuel economy by more than a fourth. Ford currently forms 2.56% of the SPDR S&P Consumer Discretionary ETF (XLY).

With the F-150, Ford has been able to create an opportunity for the company by creating an appealing product and meeting regulatory standards at the same time.

However, there’s increased scrutiny from regulators that could take a toll on automakers’ profitability. We’ll look at this in detail in the next part of this series.

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26 Jun

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WRITTEN BY Aditya Raghunath

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26 Jun

Beyond Meat Stock Up Today on New Product Launch

WRITTEN BY Rajiv Nanjapla

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