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Ford Motor Company (F), General Motors Company (GM): Three Things to Learn From May Auto Sales

Company-wise performance

Now let’s have a look at the company-wise performances:

General Motors Company (NYSE:GM) May sales came in below the Street consensus expectations, partially driven by weak fleet sales. General Motors Company (NYSE:GM) posted sales increase of 3.1%, below Street’s consensus of +5.7%. GM truck sales were up 9.7% while car sales were down 6.4%. General Motors Company (NYSE:GM) large pickup sales were up 23% and commanded 36.2% of the market. GM had 17.5% market share for the entire industry in May, ~90bp below the same period last year, and sequentially down ~100bp.

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 7x makes the stock a buy.

Ford Motor Company (NYSE:F) May sales were up 14.1%, above consensus of +9.9%. In the month, Ford’s passenger car sales were up 9.4% y/y led by improvement in Fusion sales. Ford truck sales were up 16.8% with F-Series sales up 31%, and Escape up 26% (with Escape posting its best-ever sales month in its 13-year history).

Ford Motor Company (NYSE:F) posted a market share of 17.0% for the month, up ~90bp on year-over-year basis and ~50bp sequentially; the 17.0% market share is the best monthly market share for Ford Motor Company (NYSE:F) since mid-2011, when Ford sales benefited post the Japanese tsunami.

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. A strong product portfolio along with the fact that the stock is trading at a cheap forward multiple of 8x makes the stock a buy. Its One Ford strategy is expected to bring exceptional bottom-line improvement.

Toyota Motor Corporation (ADR) (NYSE:TM) posted a 2.5% increase. Passenger car sales were up 4.0%, while light truck sales increased by 0.5%. Toyota Motor Corporation (ADR) (NYSE:TM) share was 14.4% in May, down ~80bps year-over-year but up ~70bps 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 the Lexus division to profitability will also help the company to grow.

Final word

A comeback by SAAR after two months of weak results has sent bullish signals to the market. However, the prior weakness has told us one thing: The SAAR for 2013 may not reach the 16 million mark.

The article 3 Things to Learn From May Auto Sales originally appeared on Fool.com and is written by Zain Abbas.

Zain Abbas has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Zain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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