Last week, automakers unveiled second-quarter 2020 sales reports. Sagging showroom traffic amid the coronavirus rampage resulted in a sharp drop in sales during second-quarter 2020. Lush incentives and easy financing terms failed to beat the coronavirus blues. Fleet sales to rental car companies, corporations and government agencies have been hit hard, and recovery is expected to be slow as corporate customers are resorting to cost cuts.
Detroit Big 3 carmakers including General Motors, Ford and Fiat Chrysler reported a year-over-year sales decline of 34%, 33.3% and 39%, respectively, on a volume basis. Japan-based auto bigwigs Toyota, Honda and Nissan recorded a year-over-year plunge of 34.6%, 15.5% and 49.5%, respectively. Vehicle sales of German auto giants including Volkswagen and BMW AG fell 29% and 40%, respectively, during second-quarter 2020.
China based-EV maker was a major outlier. NIO delivered 10,331 vehicles in the second quarter that exceeded the firm’s guidance and increased 191% from a year ago. Red-hot U.S. EV maker Tesla’s TSLA second-quarter vehicle deliveries handily surpassed analysts’ estimates. Tesla delivered a total of 90,650 vehicles, which comprised 10,600 Model S/X and 80,050 Model 3/Y vehicles.
(Read the Last Auto Stock Roundup here)
Recap of the Week’s Most Important Stories
General Motors GM announced that its subsidiary GM Defense (GMD) has secured a firm-fixed-price contract worth $222.9 million combined to manufacture the firm’s infantry squad vehicle offering and facilitate initial deliveries of the platform to the U.S. Army. GMD confirmed that the contract is for the first batch of 649 such vehicles, while the total authorized target for the next decade is for 2,065 vehicles. Distribution of the first 649 vehicles will occur over the next five years and 1,070 in the next eight years. Under the first contract, GMD will conduct work through Jun 24, 2028 and the second through Jun 24, 2021.
NIO Inc. NIO announced that its strategic investors have completed the first two installments of cash injections for NIO Anhui. The investor group has pledged a cumulative contribution of 7 billion yuan in five installments, with 3.5 billion yuan to be paid in the first installment, 1.5 billion yuan in the second installment on or before Jun 30, 2020, 1 billion yuan in the third installment on or before Sep 30, 2020, 500 million yuan in the fourth installment on or before Dec 31, 2020, and 500 million yuan in the fifth installment on or before Mar 31, 2021.
Ford F is collaborating with Disney to launch Bronco 4x4 SUVs across its media networks on Jul 13, marking the first-ever prime-time product reveal through the latter’s broadcast, cable, Internet and online platforms including ABC, ESPN, National Geographic and Hulu. Custom three-minute videos are planned for each network and two- and four-door Bronco models, as well as a smaller Crossover named the Bronco Sport will likely debut. Ford originally intended to showcase the all-new Bronco at the North American International Auto Show in Detroit in June, which was postponed due to the coronavirus outbreak.
Nissan NSANY plans to develop seven new vehicles in Africa in the next two years. In Africa, Nissan will expand the SUV (sports utility vehicles) and cross-over portfolio with seven new models, four of which will be in the SUV category. It plans to make Africa a hub for light commercial vehicles (LCVs), open plants in Ghana and Kenya, as well as increase the production of its popular Navara pick-ups. The investment in Navara is projected to generate 400 new positions at Nissan SA and another 800 at components’ suppliers.
The following table shows the price movement of some of the major auto players over the past week and six-month period.
In the past week, Tesla has gained the most, while Harley-Davidson has registered the maximum decline. In the past six months, all stocks apart from Tesla and AutoZone have declined.
What’s Next in the Auto Space?
Watch out for usual news releases and further updates on the COVID-19 pandemic’s impacts on the auto sector.
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