The US auto industry
At the beginning of 2018, the US auto industry faced investor concern over weakening sales. Many large auto companies, including Ford (F), Toyota (TM), and Fiat Chrysler Automobiles (FCAU), cautioned investors that US auto sales in 2018 could be lower than in 2017. According to Autodata, April’s US light vehicle sales’ SAAR (seasonally adjusted annual rate) stood at 17.2 million units, which was higher than 17 million units a year ago. This positive sales growth along with better earnings than the first quarter restored auto investors’ (XLY) confidence and drove optimism in May. Let’s take a closer look.
Top gainers in May
In May, the largest US automaker, General Motors (GM), emerged as the top gainer of the auto industry. It outperformed the broader market by a large margin with its outstanding 16.2% positive return against a 2.2% rise for the S&P 500 benchmark.
By stock performance, Advance Auto Parts (AAP), Ferrari (RACE), FCAU, and O’Reilly Automotive (ORLY) came in second, third, fourth, and fifth, respectively, in May. Auto parts retailers AAP and ORLY delivered positive returns of 12.4% and 5.2%, respectively. Italian luxury carmaker Ferrari and its former parent company Fiat Chrysler ended the month with gains of 7.1% and 6.4%, respectively.
Ford, the second-largest US automaker, rose 2.8%. Electric carmaker Tesla (TSLA) fell 3.1% due to continued slower-than-expected Model 3 production.
In this series, we’ll take a look at recent important updates in the auto industry. We’ll also see how mainstream automakers are raising their outlook for autonomous vehicle development in 2018.
In the next part, we’ll take a look at SoftBank’s recent investment in GM Cruise and what it means for investors.