Auto Roundup: AZO's Q3 Results, TM's $531M Investment & More

Last week, the European Automobile Manufacturers Association released data on new car registrations for April 2024. Registrations in the European Union (“EU”) car market came in at 913,995 units last month, witnessing year-over-year growth of 13.7%. Registrations in key markets of Germany, Spain, France and Italy rose 19.8%, 23.1%, 10.9% and 7.7%, respectively, on a year-over-year basis.

In the first four months of 2024, EU market vehicle registrations reached 3.7 million units, up 6.6% year over year. During the said timeframe, registrations in Germany and Spain recorded growth of 7.8% each on a year-over-year basis. Registrations in France and Italy increased 7% and 6.1%, respectively, in the first four months of the year.

On the news front, auto parts retailer AutoZone AZO declared its quarterly results. Japan’s auto giant Toyota TM made it to the headlines with plans to spend $531 million in a Texas factory. Meanwhile, electric vehicle giant Tesla TSLA slashed Model Y production in China. Clean energy vehicle maker Nikola NKLA received an order for 100 hydrogen fuel cell electric trucks from AiLO Logistics. Finally, custom vehicle solutions provider Shyft Group SHYF inked a partnership with Amerit Fleet Solutions.

Recap of Last Week’s Important Stories

AutoZone reported earnings of $36.69 per share for third-quarter fiscal 2024 (ended May 4, 2024), up 7.5% year over year. Earnings surpassed the Zacks Consensus Estimate of $35.72 per share. Net sales grew 3.5% year over year to $4,235.5 million. The top line marginally missed the Zacks Consensus Estimate of $4,292 million. In the reported quarter, domestic commercial sales totaled $1.14 billion, up from $1.11 billion recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) were flat.

As of May 4, 2024, AutoZone had cash and cash equivalents of $275.4 million, down from $277.1 million as of Aug 26, 2023. Its total debt was $8.5 billion as of May 4, 2024, compared with $7.67 billion as of Aug 26, 2023. The company repurchased 242,000 shares of its common stock for $737.7 million during the fiscal third quarter at an average price of $3,036 per share. At quarter-end, it had $1.4 billion remaining under its current share repurchase authorization.

AZO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Toyota is set to invest $531 million in its truck manufacturing facility in Texas to improve the production of vehicle components at the facility that assembles the Toyota Tundra and Toyota Sequoia. The project is expected to create 411 jobs and could span more than 500,000 square feet of new space. The proposal awaits Bexar County’s approval and highlights the company’s plans and potential community benefits. Bexar County is contemplating incentivizing the project to include a 10-year, 100% tax abatement worth $14.7 million and a skills development grant of up to $250,000. These incentives hinge on creating 250 jobs with an average annual salary of $71,864.

In the past few years, Toyota has invested heavily in its Texas plant, including a $398 million upgrade in 2019 for its body-on-frame vehicle lineup redesign. This ongoing investment highlights Toyota's dedication to producing quality vehicles in the United States and meeting customer needs effectively.

Nikola received a major order for 100 hydrogen fuel cell electric trucks from AiLO, a key drayage carrier in the Ports of Los Angeles and Long Beach. AiLO placed the order through Tom’s Truck Centers, with deliveries set for 2025. This move is part of AiLO's strategy to expand its sustainable logistics services. Ryan Clayton, Nikola’s global head of sales, highlighted the importance of customer satisfaction and repeat orders, noting AiLO’s commitment to sustainability with this expanded purchase. AiLO, which includes MDB Transportation, had previously ordered 50 Nikola FCEVs, with those deliveries already underway throughout 2024.

AiLO CEO Jack Khudikyan emphasized the company's focus on innovation, technology, and sustainable practices to redefine the logistics industry. The addition of Nikola FCEVs aligns with AiLO’s dedication to environmental stewardship and advanced technologies.

Tesla has reduced production of its best-selling Model Y by at least 20% at its Shanghai plant from March to June due to weakening demand amid an economic slowdown and fierce price competition in China. This Shanghai plant, Tesla’s largest global manufacturing hub, has seen Model Y output drop by 17.7% in March and 33% in April year over year. Despite the cuts, Tesla still aims to sell 600,000 to 700,000 cars in China in 2024, maintaining its original target.

In April, Tesla reduced Model Y prices in China to their lowest levels since its 2021 launch and introduced zero-interest financing for Model 3 to boost sales. The company’s market share in the pure electric and plug-in hybrid market in China fell to 6.8% in the first four months of 2024 from 7.8% in 2023, according to the China Passenger Car Association. Meanwhile, local competitor BYD led with a 34.3% share for the first four months of 2024. Tesla is increasingly focusing on AI and robotaxis now.

Shyft partnered with Amerit Fleet Solutions to provide ongoing support and maintenance for Blue Arc EV trucks across the United States. John Dunn, Shyft's president and CEO, emphasized the company’s commitment to a seamless EV transition for last-mile customers and drivers. The new service model includes Amerit’s EV Fleet Maintenance program, onsite dealer services and access to the Blue Arc EV Tech Support team to minimize downtime. Blue Arc EVs will be available through select dealerships, with Shyft-trained technicians ensuring convenient service.

Shyft’s tech support team of more than 30 certified experts maintains high service standards, while an integrated service and parts solution ensures quick maintenance and repairs. The Blue Arc platform boasts a commercial-grade EV chassis from top suppliers like Akebono, Bosch, Dana, Hendrickson and Modine, designed for rigorous commercial use.

Price Performance

The following table shows the price movement of some of the major auto players over the last week and six-month period.

Zacks Investment Research
Image Source: Zacks Investment Research

What’s Next in the Auto Space?

Various auto biggies will release their U.S. vehicle delivery numbers for May. Stay tuned for usual news updates.

Where Will Stocks Go…

If Biden Wins? If Trump Wins?

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Toyota Motor Corporation (TM) : Free Stock Analysis Report

AutoZone, Inc. (AZO) : Free Stock Analysis Report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

The Shyft Group, Inc. (SHYF) : Free Stock Analysis Report

Nikola Corporation (NKLA) : Free Stock Analysis Report

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

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