Zacks Industry Outlook Highlights: General Motors, Ford Motor, Toyota Motors, Honda Motor and Nissan Motor - Press Releases

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For Immediate Release

Chicago, IL - December 2, 2011 - Today, Zacks Equity Research discusses the Autos, including General Motors Company ( GM ), Ford Motor Co. ( F ), Toyota Motors Corp. ( TM ), Honda Motor Co. ( HMC ) and Nissan Motor Co. ( NSANY ).

A synopsis of today's Industry Outlook is presented below. The full article can be read at  http://www.zacks.com/stock/news/65601/Auto+Industry+Stock+Outlook+and+Review+%96+Dec.+2011


The auto industry is highly concentrated. About 10 global automakers account for over 77% of the production worldwide and 13 automakers account for more than 90% of total vehicles sold in the U.S.

In the first 10 months of 2011, General Motors Company ( GM ) led with a 19.8% market share in the U.S., followed by Ford Motor Co. ( F ) with a 16.8% market share, Toyota Motors Corp. ( TM ) with a 12.6% market share, Chrysler-Fiat with a 10.7% market share, replacing Honda Motor Co. ( HMC ) and Nissan Motor Co. ( NSANY ) at the last spots with 9.1% and 8.1% market shares, respectively.

The global economic meltdown in 2008 provided an impetus to massive structural changes in the auto industry, setting the stage for growth over the next decade. Given the high barriers to entry and the need for scale economies (in operations, supply chain and marketing), the global auto industry landscape is expected to be ruled by global automakers and suppliers based in the six major auto markets -- China, India, Japan, Korea, Western Europe and the U.S.

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To remain competitive, automakers will need to design vehicles that meet the requirements of consumers in both mature and emerging markets. Automakers will focus on more user-friendly and low-cost vehicles that are also the most advanced technologically.

The automakers will continue to shift their production facilities from high-cost regions such as North America and the European Union to lower-cost regions such as China, India and South America. For example, China and South America together are projected to represent more than 50% of growth in global light vehicle production in the auto industry from 2008 to 2015.

There are two underlying factors behind this location shift in the auto industry. The first is the cost factor. The cost of labor in emerging auto markets continues to be a fraction of that in the developed world. The second is the demand factor.

Many low-cost regions, including the emerging auto markets, have high potential for growth. Thus, the shift in auto industry production facilities will lead to a localization of the manufacturing base that will bring down transportation costs. The emergence of trading blocs is also giving this process a push. It is likely that over time there will be fewer car imports from outside a trade zone.

Further, automakers have started to reduce the number of technological platforms with a greater diversity of models produced from each platform in order to remain cost competitive in the auto industry. For example, Honda, with its flexible common platform, has developed three dimensionally distinct versions of the Accord, allowing for designs where 60% of the components are common. Ford aims to build 680,000 vehicles per core global platform by 2015, up from the current level of 345,000 units.

The role of governments must not be overlooked. Governments in all major countries have become active auto industry players. Their energy and environmental policies will be strongly responsible in molding the auto industry in the coming years.

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FORD MOTOR CO ( F ): Free Stock Analysis Report
 
GENERAL MOTORS ( GM ): Free Stock Analysis Report
 
HONDA MOTOR ( HMC ): Free Stock Analysis Report
 
NISSAN ADR ( NSANY ): Free Stock Analysis Report
 
TOYOTA MOTOR CP ( TM ): Free Stock Analysis Report
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: F , GM , HMC , NSANY , TM

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