The Zacks Analyst Blog Highlights: Nissan Motor, General Motors, Ford, Fiat Chrysler And Honda Motor

For Immediate Release

Chicago, IL – January 8, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Nissan Motor (OTC:NSANY) , General Motors (NYSE:GM) , Ford (NYSE:F) , Fiat Chrysler (NYSE:F) and Honda Motor (NYSE:HMC) .

Here are highlights from Tuesday’s Analyst Blog:

U.S. Auto Sales in 2019 Hit 17 Million, but Down Year Over Year

U.S. auto sales data for 2019 is out, with all major auto companies having reported fourth quarter and full-year sales numbers. According to Automotive News, domestic light vehicle sales totaled 17.1 million units in 2019. With that, automakers hit the goal of 17-million sales for the year. Notably, the 17-million sales mark was achieved for the fifth straight year. Importantly, 2000 and 2001 were the only years before 2015 when car sales touched 17 million units.

Fed’s dovish stance, low unemployment rates and robust wage growth were tailwinds for the consumer-cyclic auto industry in 2019. Strong economic conditions and healthy consumer sentiments contributed to robust 17-million sales. However, it’s not all good news. While automakers managed to top 17 million unit sales, total sales volumes were shy by around 200,000 units from the 2018 level of 17.3 million. Tariff woes, increasing popularity of ride sharing services and rising car prices on the back of technological advancements tamed consumer demand to some extent, resulting ina year-over year decline in U.S. auto sales.

With more and more sedans getting discontinued, demand for compact SUVs and trucks remained strong. RAM pickups posted the biggest year-over-year gain of 18%. Kia Telluride, the new midsize SUV, recorded strong sales. Mitsubishi’s Outlander registered the best sales figure in the last 13 years. Hyundai Motor — aided by Palisade and new Santa Fe SUVs —registered its best sales figure since 2016 of 688,771 units, up 3% year over year. Mercedes-Benz USA and BMW’s U.S. sales were also up 1% and 1.8% year over year, respectively.

However, leading Japan-based automakers like Nissan Motor recorded decline in U.S. car sales from 2018. Detroit 3 carmakers including General Motors, Ford and Fiat Chrysler witnessed fall in car sales in 2019. Let’s delve deeper into the sales figures of these auto bigwigs.

Big 3 U.S. Automakers’ Sales Stumble in 2019

For full-year 2019, General Motors’ U.S. sales declined 2.3% to 2,887,046 units. While the company was hit by lower overall sales of the Chevrolet brand, sales from GMC, Cadillac and Buick brands edged higher. Lower year-over year sales of a few models like Chevrolet Tahoe and Suburban, GMC Yukon, Cadillac Escalade, Chevrolet Malibu and Bolt resulted in overall decline in sales volumes. Nonetheless, the top U.S. carmaker had its best year for crossovers and achieved yearly records in the compact, small and small luxury segments. The company’s crossovers rose 12.7% from a year ago in 2019 to about 1,165,769 units. Models like Chevrolet Trax, Traverse and Equinox, among others, registered gains in sales volumes.

Fiat Chrysler’s overall sales in 2019 totaled 2,203,663 units, down 1% from the 2018 level. Overall sales from the company’s top-selling Jeep brand also dipped 5% year over year to 923,291 units. Total sales from Chrysler, Dodge, Fiat and Alpha Romeo brands also declined in 2019. The major highlight of the year for Fiat Chrysler was the RAM brand, which recorded sales of 703,023 units, up18% year over year. Markedly, the Dodge Charger recorded sales of 96,935 vehicles for the year, the best since 2013.The Gladiator ended the year with 40,047 unit sales, following its May debut.

Ford’s total vehicle sales in the United States declined 3% year over year to 2,422,698 in 2019,as the firm trimmed sedans from the Ford brand. While the Ford division sold 2,310,494 units (down 3.5%), the Lincoln marque recorded sales of 112,204 units (up 8.3% year over year). While the company’s overall sales of cars and SUVs declined in 2019, that of trucks recorded yearly gains of 9.1% to amount to 1,243,136 units. While Ford F-Series remained the firm’s best-selling nameplate in the U.S. market with 896,526 units, it marked a year-over-year decline of 1.4%. Meanwhile, Transit, Transit Connectors and heavy trucks registered gains. Ranger sales totaled 89,571 in its first year following its return to the market.

Ford currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2019 U.S. Sales Report of Big 3 Japan Carmakers

Toyota’s U.S. sales for full-year 2019 came in at 2,383,349 vehicles, down 1.8% year over year. Sales for both its namesake and Lexus brands declined 2% and 0.1% to 2,085,235 units and 298,114 units, respectively. Deliveries for models including YARIS, Mirai, Prius and Sienna, among others, tumbled in double-digit percentages. Higher year-over-year sales of Land Cruiser, RAV 4 and Lexus trucks offset the decline. Markedly, RAV4 2019 recorded an all-time best ever yearly performance with 448,071 units.

Honda Motor’s U.S. sales inched up 0.2% year over year to 1,608,170 units. While total car sales declined 3.1% year over year to 706,463 units, truck sales increased 2.9% to 901,707 units. Higher deliveries of CR-V, HR-V and Ridgeline models, among a few others, helped the company to post increase in sales volume in 2019.

Nissan’s U.S. sales slid 9.9% year over year in 2019 to 1,345,681 units amid lower sales of models including Sentra, Versa, Rogue and Murano, among others. Notably, sales of NV commercial vans and NV 200 set records in 2019. Nissan Kicks also delivered solid year-over-year gains of 150% in 2019.

2020 U.S. Auto Sales: What to Expect

According to estimates by LMC Automotive and J.D. Power, U.S. auto sales are likely to decline to around 16.7 million units in 2020. New emission standards, weak credit growth, high cost of new vehicles and robust demand for ride-sharing services may weigh on car sales in 2020.Technological development with regard to electric, autonomous and connected cars demands huge investment, which will then be passed on to customers, leading to high costs of vehicles. While automakers are selling fewer cars, new vehicles are getting pricey. As the Auto industry is consumer cyclic in nature, worsening credit conditions and slow retail spending pose concerns.

Automakers seem to be worried and are prepping for an uncertain 2020. Major auto biggies like General Motors, Ford, Nissan and Volkswagen (DE:VOWG_p), among others have been slashing thousands of jobs. Capex cuts and factory shutdowns are increasing, and it appears that car companies are focused on stockpiling cash amid fears of economic slowdown.

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