General Motors Company (GM), Ford Motor Company (F) & Toyota Motor Corporation (ADR) (TM): Will U.S. Auto SAAR Reach 16 Million in 2013?

Company-wise performance

For General Motors Company (NYSE:GM), June sales came in above Street consensus expectations, partially driven by strong retail sales. GM posted sales increase of 10.6%, above Street consensus of 5.8%. GM truck sales were up 12.5%, above the expectation of an 11.0% increase, while car sales were up 8.0%, well above the expectation of 0.0%. General Motors Company (NYSE:GM) large pickup sales were up 29% and commanded 37.4% of the market. GM had 18.9% market share for the entire industry in June, ~45 basis points below the same period last year but up ~140 basis points sequentially.

General Motors Company (NYSE:GM) has been undergoing a solid change under the supervision of the determined CEO, Dan Akerson. Also the company is undergoing the largest product portfolio turnaround since its inception. This along with the fact, that the stock is trading at a cheap forward multiple of 7 times earnings makes the stock a Buy.

Strong Fiesta and F-series sales bring in a strong June for Ford (NYSE:F)

Ford Motor Company (NYSE:F)’s June sales were up 17.7%, above the consensus of 15.4%. In the month, Ford’s passenger car sales were up 16.5%, above the estimate of +0.0%, led by Fiesta sales, which were up 104.0%. Ford Motor Company (NYSE:F) truck sales were up 18.4%, above the estimate of 16.0%, with F-Series sales up 24%, and Edge up 32%. Ford posted a market share of 16.7% for the month, up ~55 basis points year-over-year but down ~30 basis points sequentially.

Ford Motor Company (NYSE:F)’s small car sales have been the bright spot for the company. Also, the F-series trucks have been the most sold truck brand in the US. Strong product portfolio along with the fact that the stock is trading at a cheap forward multiple of 8 times earnings makes the stock a Buy. Its One Ford Motor Company (NYSE:F) strategy is expected to bring exceptional bottom-line improvement.

A Japanese OEM worth a look

Toyota Motor Corporation (ADR) (NYSE:TM) posted a 14.0% increase, above the expectation of 9.5%. Passenger car sales were up 12.4%, above the estimate of 11.5%, while light truck sales increased by 16.2%, well above the expectation of 7.0%. Toyota Motor Corporation (ADR) (NYSE:TM) share was 13.9% in June, up ~10 basis points year-over-year but down ~50 basis points sequentially.

Toyota Motor Corporation (ADR) (NYSE:TM) has recently been viewed as a favorable stock after the company reported a profitability level (this earnings season) it once used to have prior to the crisis of 2009. Also, the company’s products (Camry and Corolla) have been a super hit in the market. The return of Lexus division to profitability will also help the company to grow.

Final word

The auto industry continues to show strong sales figure propelled by high average of fleet, pent-up demand and strong economic indicators. However, given the current circumstance, it will be far from reality if one deduces SAAR for the year to be more than 16 million units.

Zain Abbas has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors Company (NYSE:GM). The Motley Fool owns shares of Ford Motor Company (NYSE:F).

The article Will U.S. Auto SAAR Reach 16 Million in 2013? 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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