General Motors Company (GM), Ford Motor Company (F) & Toyota Motor Corporation (ADR) (TM): Fingers Crossed for May Auto Sales

Similarly, I am bullish on Ford Motor Company (NYSE:F) as well. The company’s future looks bright in reagrds 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 as 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. In fact, Goldman Sachs sees it as a must buy and places it on its conviction list due to the stock being cheap and the company actively working to restructure its European operations under the One Ford Motor Company (NYSE:F) strategy.

Japanese companies – A disappointing story?

The continuously weakening yen has hardly helped the Japanese OEMs to improve their market share in the US auto industry. However, the recent decline in market share for Toyota Motor Corporation (ADR) (NYSE:TM) can be attributed to the sharp cuts in its incentives. However, the positive out of this is that the company is expected to experience an improved average selling price given that it has taken its foot off the promotional pedal.

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. And hence shows that the company’s declining market share in US doesn’t mean that the company is not performing well in the world.

Things are also getting better in China, where Japanese automakers faced serious hostility from 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 in April – three time what was exported last October. Japanese brands now account for 16% of the market after dipping to as low as 7%.

Final word

Many are betting that May will come in as a strong month for auto sales after three back-to-back sequential declines in the US SAAR. I am bullish on all of three of them. General Motors Company (NYSE:GM)’s cheap valuation and upcoming truck launch, Ford Motor Company (NYSE:F)’s success in small cars and Toyota Motor Corporation (ADR) (NYSE:TM)’s improving global end markets give me enough reason to be so.

The article Fingers Crossed for May Auto Sales originally appeared on Fool.com.

Zain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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