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Wall Street Journal
3 days ago
- Automotive
- Wall Street Journal
European Auto Sector Gains on New U.S. Trade Pact
Investors in the European auto sector cheered Sunday's trade agreement between the U.S. and EU, with German carmakers among the biggest gainers on the Stoxx Europe 600 index in early trade. The agreement will see a 15% tariff applied to EU goods entering the U.S., easing pressure on the sector that President Trump had targeted with a 25% duty since early April.
Japan Times
23-07-2025
- Automotive
- Japan Times
Japan carmakers put squeeze on households with higher loan rates
Japan's automakers have begun hiking loan rates as a historic central bank pivot to unwind three decades of ultraloose monetary policy trickles down to consumers, raising household credit costs. More than a year after the Bank of Japan's first interest rate increase in 17 years, the volatile march higher in superlong bonds is raising the cost of servicing loans, including car repayments — making the auto sector one of the first key pain points as households look to tighten their belts. Japan's biggest carmakers are already raising rates. Honda's annual interest rate has been at 5.5% since April, according to the company's website, a bump from the 4.9% it offered in June 2024. Mazda said it currently offers a 3.9% annual interest rate for residual credit loans, an increase from last year's 3.4%, through its joint venture with Toyota Finance. Meanwhile, Subaru said its 3.9% residual loan rate is unchanged from last year. Loans, credit and leases accounted for about 42% of all new vehicle purchases in the country in fiscal 2023, according to the Japan Automobile Manufacturers Association. "The nation is entering an era of normalized interest rates for the first time since these financing tools became common use,' said Hikaru Todoroki, principle auto consultant for KPMG. While measures like extending repayment periods may help contend with rising rates, there's a risk the auto industry turns to discounting — creating price volatility that would ultimately hurt both companies and consumers, he said. Japan's long battle with deflation was synonymous with incredibly low interest rates that, alongside repayment terms that focus on the residual value of a car, made luxury models relatively attainable. It's not unusual for a middle class family to drive a Toyota Alphard, a large van that sells for as much as ¥10 million (about $67,000). But growing pressure on household expenditure may reshape what consumers buy. The ripple effect of higher loan repayments may be a drop in used-car prices and a surge in demand for more budget-friendly new-car options, according to Bloomberg Intelligence senior auto analyst Tatsuo Yoshida. Tosai Group, which operates a network of new and used car dealerships across Japan's Kanto region, has offered loans with a 1.9% interest rate for several years. Billboards touting low rates line the street in Misato, Saitama Prefecture, where the company's flagship store is located. But it's unlikely to be able to offer those deals over the medium to long term, which will weigh on demand, according to Yoshihiro Baba, a managing director at the company. "We might have to take those down,' he said, looking at the advertisements. A drop in demand would deal a major blow to an industry already hit hard by U.S. President Donald Trump's tariffs on cars and parts. Japan's major carmakers have warned the duties will hammer their bottom lines, but the impact also risks derailing Japan's economic recovery given the importance of the sector. The BOJ, meanwhile, is due to meet on July 31. While policymakers are expected to keep the benchmark rate unchanged, persistently high inflation is likely to keep the central bank on the path toward further interest rate increases later this year. Low interest car loans have allowed banks and automobile manufacturers, along with the financiers and dealerships they work with, to lend money to more customers, said Yuuki Fukumoto, senior financial researcher at NLI Research Institute. "Interest rates are surely going to keep rising.'
Bloomberg
23-07-2025
- Automotive
- Bloomberg
Franklin Templeton: Japan Deal Shows Auto Sector is Key
Christy Tan, Investment Strategist at Franklin Templeton Institute, says Japan's trade agreement with the US shows that deals can be reached when both countries want one badly. She adds that the deal shows how important the auto sector is in trade talks. She speaks with Yvonne Man and David Ingles on "Bloomberg: The China Show." (Source: Bloomberg)
Yahoo
19-07-2025
- Automotive
- Yahoo
F vs. GM: Which Legacy Automaker Looks Stronger Ahead of Q2 Earnings?
As the second-quarter 2025 earnings season approaches for the auto sector, investors are closely watching U.S. auto giants Ford F and General Motors GM to determine which stock is better positioned ahead of results. GM is scheduled to report earnings next Tuesday, while Ford will release its quarterly results on July 30. Q2 Earnings Whispers for General Motors and Ford The Zacks Consensus Estimate for GM's to-be-reported quarter's earnings and revenues is pegged at $2.44 per share and $45.34 billion, respectively. In the trailing four quarters, the company surpassed EPS estimates on all occasions, with the average earnings surprise being 10.16%. General Motors Company Price and EPS Surprise General Motors Company price-eps-surprise | General Motors Company Quote The consensus mark for F's EPS and sales are 30 cents and $41.5 billion, respectively. Ford's earnings surprise history isn't that solid. In the past four quarters, the company beat the estimates twice, missed once and matched on the other. Ford Motor Company Price and EPS Surprise Ford Motor Company price-eps-surprise | Ford Motor Company Quote Our proprietary model does not conclusively predict an earnings beat for either of the companies this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. General Motors carries a Zacks Rank #3 and has an Earnings ESP of -4.05%. Ford has an Earnings ESP of -36.59% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.) U.S. Vehicle Deliveries of F & GM in Q2 Ford sold 612,095 vehicles in the quarter under discussion, up 14.2% from the year-ago period. Strong demand for trucks and hybrids drove the volumes. F-Series truck sales surged 11.5% to 222,459 units. Maverick witnessed the best quarter ever with 48,041 units, up 26.3% year over year. Sales of electrified vehicles (including pure EVs and hybrids) were up 6.6% to 82,886 units in the second quarter of 2025. However, fully electric cars saw a 31% decline in sales, while hybrid volumes soared 23.5%. General Motors sold 746,588 units, up 7.3% year on year. Sales were up across all GM brands—Chevrolet, Cadillac, Buick and GMC. Chevrolet, GMC and Cadillac sales increased 5.8%, 6.3% and 15.3%, respectively. Buick is GM's fastest-growing brand so far this year, with sales growing 19.3% in the second quarter and 29.2% in the first half of 2025. EV sales rocketed 111% to 46,280 units in the quarter under discussion. Electrification Strides of General Motors and Ford The Detroit automaker accelerated electric vehicle sales and market share in the first half of the year, thanks to expanded electric offerings across three of its four brands. The company's diverse lineup, including the Chevy Equinox EV, Cadillac Lyriq, Optiq, Cadillac Escalade and GMC Hummer EV, is driving sales. Chevy Equinox EV topped Ford's Mustang Mach-E sales in the first half of 2025 to become the best-selling non-Tesla EV in America. General Motors' deals with Vianode, Lithium Americas, LG Chemical, POSCO Chemical and Livent have boosted its EV supply chain, aligning with its long-term electrification goals. While Ford's EV sales dropped year over year in the second quarter of 2025, the automaker's hybrid strategy is also noteworthy. The Model-e segment faces near-term headwinds. After over $5 billion in losses in its EV business in 2024, Ford expects to incur huge losses in the division this year as well. However, Ford appears strategically positioned for long-term growth, driven by the strong momentum in hybrid sales, efforts to scale operations, adoption of digital tools to boost manufacturing efficiency, and a focus on vertical integration through insourcing of key components. Tariff Impact on F and GM Ford has cited a potential $2.5 billion impact from U.S. President Trump's tariffs. While Ford aims to offset $1 billion of this through strategic actions, it is expected to take a hit of $1.5 billion in 2025. Meanwhile, General Motors anticipates a profit impact of $4-$5 billion due to tariffs on imported vehicles and auto parts. Dividend Comparison Ford has a high dividend yield of more than 5%, way better than the broader industry's yield of 0.3% on average. Ford's yield also compares much better than GM's 1.13%. Image Source: Zacks Investment Research Ford targets distributions of 40-50% of FCF going forward, demonstrating its commitment to shareholder return. Its high dividend yield provides some buffer against the stock's volatility and could entice those seeking steady income amid uncertain market conditions. How Does the Consensus Estimate Stack Up For F and GM? The Zacks Consensus Estimate for GM and F's 2025 EPS implies a year-over-year decline of 12.3% and 40%, respectively. However, Ford's 2026 EPS is expected to grow 13.4%, compared with a 2.7% rise for GM from the projected 2025 levels. Looking at the recent estimate revisions, Ford seems to be placed better than GM. GM has seen its 2025 EPS estimate move south by a cent to $9.30 in the past 30 days. Meanwhile, Ford's 2025 EPS estimate has stayed at $1.11 over the same timeframe. Stock Performance & Valuation Year to date, shares of Ford have risen 20%, while GM's stock price has remained almost unchanged. Image Source: Zacks Investment Research In terms of value, GM stock checks the box at just 5.65X forward earnings. Still, Ford's 9.94X forward earnings multiple offers a discount to the auto sector's average of 25.82X. Plus, Ford and GM stock trade at less than 1X forward sales. Bottom Line While both Ford and GM are making critical moves in electrification and cost optimization, Ford appears better positioned heading into Q2 earnings. Despite short-term EV headwinds, Ford's hybrid momentum, shareholder-friendly capital return policy, better earnings outlook, and solid stock performance year to date give it an edge over its cross-town rival. GM's strength in EV sales and brand diversification is notable, but higher tariff exposure tempers the bull case. With a better Zacks Rank and stronger dividend yield, Ford takes the lead in this legacy automaker face-off. 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 Company (F) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBC
13-05-2025
- Automotive
- CBC
Ford set to speak after Honda postpones Ontario EV supply chain
Ontario Premier Doug Ford is set to speak with reporters on Tuesday, hours after the auto giant Honda announced it is putting a major electric vehicle supply chain planned for the province on hold. The move is the latest blow for Ontario's auto sector. General Motors announced in it will be laying off hundreds of workers at its Oshawa, Ont. plant later this year in recent weeks. It also raises big financial questions for Ford's government. His Progressive Conservatives are set to release this year's budget on Thursday, and it was expected to have significant funding to begin mining critical minerals that are crucial to building electric vehicles. Ford is scheduled to speak at a news conference at 9:45 a.m. ET in Pickering alongside Finance Minister Peter Bethlenfalvy, Transportation Minister Prabmeet Sarkaria, and Minister of Energy and Mines Stephen Lecce. You can watch it live in this story. Japan's Honda Motor said Tuesday it would put on hold a plan to build an EV supply chain in Canada after forecasting a 59 per cent profit decrease, amid the uncertainty stemming from U.S. President Donald Trump's tariffs. Honda's forecast is the latest signal of the difficulty car makers are having navigating Trump's tariffs on foreign-made automobiles at the same time the industry is being hit by the rise of Chinese EV producers. Honda said it would put on hold for "approximately two years" a plan announced with great fanfare from Canadian politicians in April 2024 to build an EV supply chain in Alliston, Ont. That decision was taken due to the current slowdown in EV demand, it said.
