The U.S. car market is estimated to grow by 16 million in 2013. The company has a wide opportunity to capture large market share and boost its revenue, especially in the U.S., as it reported more customers getting attracted to new hybrid vehicle like the Toyota Motor Corporation (ADR) (NYSE:TM) Avalon sedan and the compact Lexus CT200h.
Increasing growth rate will generate revenue
Honda Motor Co Ltd (ADR) (NYSE:HMC) reported first quarter sales growth of 30.80% in May 2013, quarter over quarter, in North America. It is expected that sales of locally produced automobiles will rise more than 95% in the coming years. Rising cost of gasoline and the customers’ interest in compact cars has compelled the company to increase its production capacity.
Honda Motor Co Ltd (ADR) (NYSE:HMC)’s two-wheeler segment reported sales growth in India from 2.21 million units in May 2012 to 2.29 million units in the first quarter ended in May 2013. Looking at the market potential, Honda Motor Co Ltd (ADR) (NYSE:HMC) recently launched Activa-i and preceded the launch of two bikes to March 2013.
Honda Motor Co Ltd (ADR) (NYSE:HMC) aims to increase its sales by 43% by the end of 2013 from 31% growth in 2012 with new introductions, rapid expansion and increasing the mileage of its vehicles. To increase its sales, the company plans to launch four new vehicles every year in India. Honda Motor Co Ltd (ADR) (NYSE:HMC) is further planning to expand by adding 500 outlets in the country and increasing its annual production capacity up to 4.6 million units by March 2014. It is expected that the company will sell 3.9 million units by 2014.
Ford Motor Company (NYSE:F), with the launch of new models and due to its turnaround strategy in Europe, will accelerate high revenue generation. Toyota Motor Corporation (ADR) (NYSE:TM)’s innovation and advanced technology makes it distinct from others, thus creating large opportunities to grow. Increasing demand and the accelerating production capacity of Honda Motor Co Ltd (ADR) (NYSE:HMC) will boost its revenue in the coming years. Therefore I recommend a buy for all three stocks.
The article 3 Auto Companies to Include in Your Portfolio originally appeared on Fool.com and is written by Madhu Dube.
Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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