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Auto Stock Roundup: GM & F's Strong Q1 China Sales, PCAR-Romeo Deal and More

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Rimmi Singhi
·4 min read
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March auto sales data for China — the world’s largest car market — released last week. Per China Passenger Car Association, vehicle sales in the country for the month of March soared for the 12th straight month to 2.53 million units. Sales spiked 75% from the corresponding period of 2020, when the country’s vehicle demand was badly hit by coronavirus woes. Deliveries of new light vehicles including sport utility vehicles, sedans and multi-purpose vehicles grew 77% to exceed 1.87 million units in March 2021. Deliveries of commercial vehicles including pickups and buses rose 68% year over year to 651,000 units. Electric vehicle (EV) sales jumped a whopping 240% year over year to 226,000 units.

Last Week’s Top News

PACCAR PCAR inked a five-year deal with Romeo Power, per which the latter will supply battery packs and battery management software to the trucking giant. The batteries will be deployed in PACCAR’s electric Peterbilt 579EV vehicles and 520EV refuse trucks in North America. According to the deal terms, PACCAR has become a minority shareholder of Romeo Power, which is one of the leading battery technology firms headquartered in California. Production of Peterbilt EV trucks with Romeo Power’s battery packs is anticipated to roll out in second-half 2021.

General Motors’ GM vehicle sales in China totaled 780,000 units for first-quarter 2021, surging 69% from the corresponding quarter of 2020. Aggressive portfolio optimization with high-end sport utility vehicles, multi-purpose vehicles and luxury vehicles yielded positive results. The mass-market brand Buick deliveries witnessed 73% growth for the first quarter from the prior-year level to more than 224,000 units. Luxury brand Cadillac deliveries topped 57,000 units, marking a year-on-year jump of 114%. No-frills brand Wuling sales doubled year over year to more than 347,000 units. Chevrolet and Baojun recorded sales of 64,000 and 86,000, respectively.

Tesla TSLA has been facing production delays in refreshed Model X and S vehicles. So, customers who are looking to get their hands on these vehicles would have to wait as deliveries of these models have been pushed back by a couple of months. The EV king has not clarified reasons for the delay. It should be noted here that new orders of the Model S Long Range or Plaid versions have a 10-14-week lead time, while orders of the new Model X will be delivered in the May-June time frame. Tesla currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford’s F vehicle sales in China increased 73.3% year over year to 153,822 units for the first quarter of 2020. The rise in sales was primarily driven by a favorable product mix, and rising demand for Ford and Lincoln brands. Ford brand vehicle sales topped 76,600 units, up 44.7% year over year. Sales of Lincoln brand luxury vehicle sales exceeded 19,300 units, jumping 217% from the prior-year quarter. Ford’s revamped portfolio — including the new Ford Explorer, Edge and Escape along with Lincoln Corsair and Aviator — is driving the firm’s China 2.0 business transformation plan and boosting sales in the country.

Price Performance

The following table shows the stock movement of a few major auto players over the past week and six-month period.

In the past six months, all stocks have increased, with General Motors being the maximum gainer. Last week’s price trend displays a mixed performance, with Harley-Davidson HOG registering the highest gain and Tesla losing the most.

What’s Next in the Auto Space?

Industry watchers will track passenger car registrations data in European Union for March 2021, which is likely to be released by European Automobile Manufacturers Association later this week. Also, watch out for any updates related to chip crunch-related disruptions in the auto market. All eyes will remain glued to how automakers tackle the semiconductor shortage and make resultant changes in business operations.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

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Ford Motor Company (F) : Free Stock Analysis Report

PACCAR Inc. (PCAR) : Free Stock Analysis Report

General Motors Company (GM) : Free Stock Analysis Report

HarleyDavidson, Inc. (HOG) : Free Stock Analysis Report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

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