Markets
AAP

Auto Stock Roundup: GM to Compensate $594.5M for Ignition Switch, Ford to Invest $4.5B in EVs

Most auto stocks recorded gains over the last one week. Among the positive developments, Ford Motor Co. F announced a $4.5 billion investment in electric and hybrid vehicles and Tesla Motors, Inc. TSLA started selling Model S in Mexico. Meanwhile, Tata Motors Limited TTM launched a new compact hatch - ZICA.

In another major development, General Motors Company GM awarded $594.5 million in compensation to the victims of accidents caused by faulty ignition switches. Meanwhile, Toyota Motor Corporation TM disclosed its production and sales plans for 2016.

Recap of the Week's Most Important Stories

1. General Motors approved 399 death and injury claims, and awarded $594.5 million in compensation to the victims of accidents resulting from faulty ignition switches. However, the company is not responsible if the mishap occurred before it emerged from bankruptcy restructuring in Jul 2009, or if the victims were partially responsible.

Considering this, the automaker did not have to compensate for 128 of the 399 approved claims. With the addition of this compensation, the costs incurred by General Motors for the defective ignition switches have now exceeded $2 billion (read more: GM Accepts 399 Claims, Compensates $594.5M in Ignition Issue ).

2. Ford announced that it will be investing $4.5 billion toward its electrified vehicles goal by 2020. With this investment, the company will be expanding its offering of hybrids and electric vehicles. Ford plans to introduce 13 new electrified vehicles by 2020. The automaker also expects that 40% of its portfolio will have electric versions by then (read more: Ford to Invest $4.5B to Meet Electrification Goals by 2020 ).

3. Toyota expects global sales of around 10,114,000 units in 2016, almost in line with the projected 10,098,000 units for 2015. The company expects sales in Japan to increase 3% year over year to 2,231,000 units in 2016. However, sales outside Japan are anticipated to drop 1% to 7,884,000 units. Toyota has decided to raise its worldwide production by 1% to 10,196,000 units next year.

The increase in global production will reflect a 1% rise in production in Japan to 4,135,000 units, while production outside Japan is likely to be nearly same at 6,062,000 units as 6,046,000 units in 2015 (read more: Toyota Reveals Weak Production and Sales Plans for 2016 ).

4. Tesla has started selling its electric car, the Model S, in Mexico. Customers can book the vehicle through the automaker's website. Tesla is also reportedly planning to expand its Superchargers network in Mexico to facilitate long trips. The automaker further aims to open a formal store in the country by the second quarter of 2016 (read more: Tesla Begins Mexican Operations, Opens Model S Bookings ).

5. Tata Motors launched a new compact hatch - ZICA. The car has been designed using inputs from the automaker's design studios in Pune, UK and Italy. It is available in petrol and diesel variants.

Performance

The performance of auto stocks was mostly positive over the last one week. Advance Auto Parts, Inc. AAP was leading the gainers among the stocks listed below due to rumors of a potential takeover. Meanwhile, AutoZone Inc. AZO recorded the maximum loss over the week, although it remained the biggest gainer over the last six-month period. Harley-Davidson was the worst performer over the longer term once again.

Company Last 1-Week Period Last 6 Months
GM -0.9% -1.9%
F +3.4% -4.4%
TSLA +4.4% -10.0%
TM +2.2% -6.1%
HMC +2.0% +0.6%
HOG +1.5% -17.4%
AAP +5.0% +1.2%
AZO -2.4% +13.6%

What's Next in the Auto Space?

Winnebago Industries will report its first-quarter fiscal 2016 (ended Nov 28, 2015) financial results before the market opens today.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

FORD MOTOR CO (F): Free Stock Analysis Report

TOYOTA MOTOR CP (TM): Free Stock Analysis Report

ADVANCE AUTO PT (AAP): Free Stock Analysis Report

AUTOZONE INC (AZO): Free Stock Analysis Report

GENERAL MOTORS (GM): Free Stock Analysis Report

TATA MOTORS-ADR (TTM): Free Stock Analysis Report

TESLA MOTORS (TSLA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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


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

In This Story

AAP F GM AZO TM

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More