Sociologists and marketers often like to joke that an industry’s leaders are those who are the best in promoting their brands. Strange as it may sound, they are right. The more efficient you advertising campaign is, the more products and services you can sell and the more popular your brand becomes.
In this article we will have a look at the frontrunners of the global motor industry. In order to define them, has considered several factors, including:
1. Sales volume and revenue
2. Brand popularity (internet search requests)
3. Some leading indicators (how often these brands are mentioned in mass media)
4. Investors’ trust
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According to Eugene Olkhovsky, ’s leading expert in financial markets from Canada, there are 12 motor brands that have their stocks traded in stock markets around the globe:
- Nissan Motor Co.;
- Toyota Motor Corp.;
- Honda Motor Co Lt.;
- PORSCHE AUTOMBL UNSP/ADR;
- Bayerische Motoren Werke AG (BMW);
- Daimler AG (USA);
- Volkswagen AG (ADR);
- Ford Motor Company;
- RENAULT SA REGIE NAT;
- General Motors Co.;
- Fiat S.p.A. (ADR);
- Peugeot SA (ADR).
As of November 2012, their average profit rate was around 2,5-3,5%.
In general, expect the stock market in general to stop rallying as it is overbought.
As for the stocks of the leading motor brand, they outpaced the average profit rate (Nissan Motor Co., Toyota Motor Corp., Honda Motor Co Lt., PORSCHE AUTOMBL UNSP/ADR, Bayerische Motoren Werke AG (BMW), Daimler AG (USA).
The comparative char below, courtesy of , gives an overall picture of price change. It can show us which motor brands are trusted by investors more than others.
In terms of investors’ trust, the following motor brands are the frontrunners:
- Nissan Motor Co.: + 12,80% per month
- Toyota Motor Corp. : + 10,05%,
- Honda Motor Co Lt. : +,10%,
- PORSCHE AUTOMBL UNSP/ADR: + 8,98%,
- Bayerische Motoren Werke AG (BMW): +8,17%.
The risk group includes those motor brands that failed to exceed the average profit rate in November. These are:
- Volkswagen AG (ADR)
- Ford Motor Company
- RENAULT SA REGIE NAT
The following group showed a decline. Investors seem to have fled these stocks.
- General Motors Co.
- Fiat S.p.A. (ADR).
- Peugeot SA (ADR).
The following factors helped the frontrunners to consolidate their positions in the market:
1. A sales increase in the USA and Europe for Nissan Motor Co. and PORSCHE AUTOMBL UNSP/ADR. Production expansion by Toyota Motor Corp.
2. The French-Japanese holding announced its plans after buying AvtoVAZ. In particular, by 2016 the holding is planning to conquer 40% of the market with its brands – Lada, Nissan and Renault. Moreover, the holding started getting rid of Volvo’s stock.
3. US consumers took advantage of cheap financing opportunities and changed outdated autos for new ones in November, thereby increasing the sales volume in the industry up to the highest level in 4 years.
4. The car sales boosted by 15% up to 1.14 million cars in November.
5. Sales managers are convinced that the sales volume will remain high in the near future.
6. Ford Motor Co. showed no major changes in November. However, the company boosted production by 11%.
Expert question the 4th item: If the car sales boosted by 15% during the reporting period then why did the stocks gain significantly less?
As for other motor brands:
· Volkswagen AG increased its sales by 29% (y/y) in the USA.
· Audi boosted its sales by 24% over the same period.
· BMW AG и Daimler AG gained 13% and 45% correspondingly.
· Toyota Motor Corp. gained 17%.
· Honda Motor Co. and Nissan Motor Co. boosted their sales by 39% and 12.9% correspondingly.
As for the losers, experts say that General Motors Co., Fiat S.p.A. (ADR), Peugeot SA (ADR) got cheaper because:
· General Motors Co., the USA’s biggest motor brand in terms of sales, announced its decision to suspend work at one of its plants.
· Fiat SpA and Peugeot SA (ADR) saw a decline amid multiple unsolved problems in the eurozone. However, the stocks now seem to be recovering.
Fiat SpA:
Peugeot SA (ADR):
Stock Market: Auto Sector Outlook
The Fed’s decision to start another round of quantitative easing (QE3) in September showed the entire world that the central bank was expecting a further economic slowdown in the USA and was determined to take active steps.
The program is aimed at restoring the US housing market growth as well as consumption and lending. Another major goal is to drop the unemployment rated down below 6%. Experts say this will take at least 2 years. The money supply is expected to boost by $2000bn.
The market reaction shows traders and investors are reassured by the news but do not believe that QE3 will back economic growth…
