The US auto industry
In February 2018, US light vehicle sales dropped ~2.4% YoY (year-over-year) after rising ~1.0% YoY in January. Despite weakness in passenger car sales, stronger demand for pickup trucks and SUVs is boosting optimism in the US auto industry.
According to Autodata, US truck sales rose 3.8% while passenger car sales fell 12.6% YoY in February. In ten months in 2017, US auto sales have showcased YoY weakness.
Auto stocks in March 2018
On March 27, the broader market was trading on a weak note with a month-to-date drop of 3.7% in the S&P 500 Index. Tesla (TSLA) and General Motors (GM) have underperformed the broader market and have lost 18.6% and 11.4% month-to-date, respectively.
Among the other automakers (FXD), Fiat Chrysler (FCAU), Honda (HMC), and Toyota (TM) have fallen 3.9%, 6.5%, and 4.9% month-to-date, respectively. As the second-largest US automaker, Ford (F) has risen ~2.1% in March so far.
Apart from the broader market weakness, investors’ concerns about a possible downturn in auto demand could be the key reason for most auto stocks trading on a negative note in March.
In this series, we’ll take a closer look at Wall Street analysts’ recommendations for auto stocks as 1Q18 comes to a close. We’ll also discuss some key updates about these auto companies that took place in the last few months.