VLKAF - Auto investors strap in ahead of big week of deliveries and sales reports
2023-06-26 15:07:20 ET
The automobile sector will hit the halfway point of the year later in the week after a winding road of gains and losses. Investors still have a few weeks before the earnings season starts, but deliveries and sales reports from automakers that cover June and Q2 could create some jolts.
Looking at the U.S. auto sector broadly, S&P Global Mobility said mixed signals continue to prevail within a new demand environment. The forecast from S&P is for sales volumes over the next several months to not dynamically change much from the current trend. S&P Global Mobility projects full-year new vehicle sales volume to reach 15.1M to mark growth of 9% from last year's level.
During the first week of July, monthly sales or quarterly deliveries reports will pour in from automakers such as Tesla ( NASDAQ: TSLA ), Rivian Automotive ( RIVN ), General Motors ( GM ), Ford ( F ), and Toyota ( TM ). S&P thinks the reports will show signs of green shoots within the auto demand environment continued in June after solid volume levels were seen in April and May.
For June, S&P Global Mobility projects new light vehicle sales volume to be up 17% year-over-year to 1.38M units. That tally would representing the 11th consecutive month in which volume has improved.
"For the second consecutive month, auto sales volumes will be supported by month-end holiday programs," observed S&P analyst Chris Hopson. "That automakers have the ability to offer holiday clearance incentives is a positive sign. It also indicates that some of the concerns regarding new vehicle affordability, low inventories, macroeconomic uncertainty, rising interest rates, and tighter credit conditions are not causing retrenchment by consumers still in the market for a new vehicle," he added.
Notably, S&P Global Mobility’s proprietary analysis of advertised dealer inventory indicated June inventory levels remain consistent with recent trend level of approximately 2.05M vehicles. While New vehicle production support exists in the form of inventory restocking, signs have emerged that manufacturers are working to preserve their strong pricing power at the expense of building back inventory levels at an excessive pace.
Auto stocks: Toyota ( TM ), Tesla ( TSLA ), General Motors ( GM ), Honda ( HMC ), Ferrari ( RACE ), Ford ( F ), Hyundai ( OTCPK:HYMTF ), Nissan ( OTCPK:NSANY ), Mercedes-Benz ( OTCPK:MBGAF ), Volkswagen ( OTCPK:VLKAF ), BMW ( OTCPK:BMWYY ), Stellantis ( STLA ), Rivian Automotive ( RIVN ), and Subaru ( OTCPK:FUJHY ).
Outside the U.S., Chinese electric vehicle makers XPeng ( XPEV ), Nio ( NIO ), and Li Auto ( LI ) will also report on monthly deliveries.
In late trading on Monday, Tesla ( TSLA ) shed 4.05% , while Lucid Group ( LCID ) showed a 3.10% gain following its Aston Martin partnership development. General Motors ( GM ) was up 2.02% and traded very close to the midpoints of the 52-week range.
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- See the automobile manufacturer stocks with the highest Seeking Alpha Quant Ratings
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Auto investors strap in ahead of big week of deliveries and sales reports