On the other hand, Cadillac is doing a fantastic job with the introduction of its new ATS and XTS models. Total sales for the segment increased 40% year-over-year to 13,808 units, with additional strength provided from sales of Escalades. Even if the company is having a hard time competing for dollars in Middle America, the firm’s flagship luxury brand remains a serious force in a highly competitive market.
In addition to posting decent sales numbers, General Motors Company (NYSE:GM) was named to replace H.J. Heinz Company (NYSE:HNZ) in the S&P 500. (Regulators have now approved Warren Buffett’s-led takeover, taking H.J. Heinz Company (NYSE:HNZ) private.) Marginal dollars thrown at the name for inclusion in the index will likely give the firm a short-term boost, but we think it’s more significant in the sense that it signals the company’s return to feasible enterprise. We think shares could see some additional upside from current levels, but we aren’t rushing into the company at this price.
Toyota
Toyota Motor Corporation (ADR) (NYSE:TM) continues to capitalize on the weak yen and sell a lot of cars in the US—207,952 of them (up 2.5% year-over-year). The firm continues to claim the top spot in retail sales, and we think investors should remember the company manages inventory slightly differently than General Motors Company (NYSE:GM) and Ford, so its product sales growth should lag other companies.
Regardless, the company’s core Toyota Motor Corporation (ADR) (NYSE:TM) brand remains solid, but we think sales of the Corolla (down 12% year-over-year) and Camry (down 0.9% year-over-year) are losing some share to the redesigned Focus and Fusion. Sales of 27,977 units and 39,216 units, respectively, are nothing to scoff at, and the firm’s customer base remains loyal and relatively sticky, in our view. Pickup truck sales were also strong, growing 18% compared to a year ago to a shade under 25,000 units. Though a good figure, we have little doubt that the F-Series is taking share from all of its competitors.
Still, we were a bit more impressed with growth at Lexus, where sales were 29% higher than a year ago at 12,422 units. Sales of the ES and LS more than doubled, and we think the Lexus consumer (perhaps more practical than Audi/BMW/Mercedes) is becoming more confident due to the rising tide of the housing and equity markets.
With the weak yen, Toyota Motor Corporation (ADR) (NYSE:TM) has a compelling price advantage, and we think shares are worth $135 each. However, return potential from current levels simply isn’t great enough to warrant a position in the portfolio of our Best Ideas Newsletter.
Honda
Honda Motor Co Ltd (NYSE:HMC) posted a solid month, with sales growing 4.5% year-over-year to 140,013 units. No doubt, the growth is lagging some of its competitors such as Ford Motor Company (NYSE:F) and Chrysler, but the growth rate was stronger than both General Motors Company (NYSE:GM) and Toyota Motor Corporation (ADR) (NYSE:TM). As with Toyota Motor Corporation (ADR) (NYSE:TM), the company didn’t experience much inventory building, so most of the sales were at the retail level. As American EVP of Sales John Mendel noted on the press release:
“Looks like American families are preparing for summer road trips as our family-friendly light truck lineup posted the best May sales in Honda Motor Co Ltd (NYSE:HMC) history. Virtually every Honda vehicle we sold in May represents a purchase by an individual customer, which means Accord, Civic, CR-V and Odyssey will maintain their industry-leading retail sales performance in 2013.”
