Like GM, I am also bullish on Ford Motor Company (NYSE:F). The company’s future looks bright in regards to its small car sales in the near future, in particular. It is obvious that small, fuel-efficient cars are demanded in higher numbers in recessionary times. According to Ford, its small car sales soared 29% in 2012. The new C-Max hybrid is a big success. Also, Ford Motor Company (NYSE:F)’s F-series truck was declared the most sold light vehicle in the US with an astounding sales figure of 645,316 units in 2012.
Overall, the stock is a cheap buy given its forward multiple of 8. The company is actively working to restructure its European operations under the One Ford strategy, which also bodes well for the company.
Toyota Motors – the face of Japanese OEMs
It wasn’t taken as surprise when the final tally for the first six months of the year showed that Toyota Motor Corporation (ADR) (NYSE:TM) edged out General Motors 4.91 million vehicles to 4.85 million vehicles to retain its distinction as the top selling automaker in the world. Toyota Motor Corporation (ADR) (NYSE:TM)’s Camry and Corolla models can easily be called the most popular cars in the market.
The market share for Toyota Motor Corporation (ADR) (NYSE:TM), unlike its Detroit peers, is expected to rise 30 bps to 14.2% due to elevated incentive spend related to intense competition in the mid-size car segment. Recently, Toyota Motor Corporation (ADR) (NYSE:TM) reported its largest annual profit in five years. Now the company expects its net income to jump 42% through 2014, which shows its phenomenal growth rate.
Things are also getting better in China, where Japanese automakers faced serious hostility from the Chinese consumer base, earlier this year, after the Senkaku-Diaoyu island rift intensified between the two nations. New data shows 16,000 cars were shipped from Japan to China last month– three times what was exported last October. Japanese brands now account for 16% of the market after dipping to as low as 7%
Final word
US auto sales have been a consistent and strong indicator of improving US economy. However, some of the analysts have gone a bit far to suggest 16 million SAAR for the year, which seems far from being plausible. As far as the companies are concerned, I am bullish on all three of them. Cheap valuations and European turnaround for Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) and improving global presence for Toyota Motor Corporation (ADR) (NYSE:TM) helps me to maintain such a point of view.
The article Do We Have a Surprise in July’s Auto Sales Release? originally appeared on Fool.com and is written by Zain Abbas.
Zain Abbas has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Zain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
