General Motors, Ford Motor, Toyota Motor, Honda Motor and Volkswagen AG highlighted in Zacks Analyst Blog:


For Immediate Release

Chicago, IL – January 15, 2013 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include General Motors Company (GM), Ford Motor Co. (F), Toyota Motor Corp. (TM), Honda Motor Co. (HMC), and Volkswagen AG (VLKAY).

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Here are highlights from Tuesday’s Analyst Blog:

China Auto Sales Lag Guidance

According to the China Association of Automobile Manufacturers (:CAAM), vehicle sales in China grew 4.3% to 19.3 million units in 2012, including a 7.1% gain in December to 1.8 million units. Despite being higher than the 2011-level of 2.5%, sales growth is lower than the 8% growth projected by CAAM as well as the double-digit growth in 2009 and 2010.

The lower-than-expected growth can be attributable to a sluggish economy, rising fuel costs, weak Japanese automakers sales owing to a conflict between Beijing and Tokyo, and drastic steps taken by a few major cities to curb traffic congestion and emission levels.

Sales by Automakers

The U.S. automakers, including General Motors Company (GM) and Ford Motor Co. (F), performed quite well in China in 2012. GM posted an impressive 23.2% rise in sales to 242,486 vehicles, driven mainly by a hefty 41.7% gain in sales at its joint-venture with SAIC Motor Corp. For the full year, the company’s sales grew 11.3% to 2.84 million units. Meanwhile, Ford sold 626,616 vehicles in the year, up 21% from 2011. The company’s December sales surged 43% to 70,510 vehicles.

Sales of Japanese automakers lagged due to the above-mentioned conflict. Sales of Toyota Motor Corp. (TM) slid 4.9% to 840,000 vehicles in 2012, including a fall of 16% in December to 90,400 vehicles. However, the automaker is optimistic about 2013. It expects sales growth of 7% in 2013, which is higher than its global target of 2%.

Sales of Honda Motor Co. (HMC) dipped 3.1% to 598,577 vehicles in the year, including a significant 19.2% fall in December to 63,264 vehicles.

Among the other automakers, Volkswagen AG (VLKAY) sold 2.81 million vehicles in the year, up 24.5% from 2011.

2013 Outlook

According to CAAM, auto sales in China are expected to rise 7% to more than 20 million vehicles in 2013, led by strong demand for passenger vehicles and economic recovery. The association believes sports utility vehicles (SUVs) will remain the fastest- growing segment in the year while commercial vehicles will record a moderate gain in sales.

China Versus U.S.

Auto sales in China had grown at a double-digit pace since 1999, except in 2008 when the global economic crisis crept in. In 2009, China overtook the U.S. as the biggest auto market in the world by sales volumes when the Beijing government introduced a stimulus package, including tax incentives for small cars. China accounted for a third of light vehicle sales growth in the last five years.

Auto sales in the U.S. grew 13.4% to the five-year high of 14.5 million vehicles in 2012 including a 9% rise to 1.4 million in December last year. A host of macroeconomic factors helped the industry reach the height. They include improving consumer confidence, falling unemployment and improvement in home sales and prices.

Sales were also fueled by strong pent-up demand, due to both aging vehicles (average age of a car reached 11 years) and the need to replace damaged vehicles from Hurricane Sandy. Banks were also friendlier as they offered greater access to loans with lower interest rates.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The SP 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.


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