August 16, 2022

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Automakers will report November U.S. auto sales later this week, with chip woes continuing to...

Automakers will report November U.S. auto sales later this week, with chip woes continuing to restrain production, keeping inventories and prices high. Ford Motor (F), General Motors (GM) and other auto stocks rose.


November sales are expected to be down notably year over year, according to Cox Automotive. But sales should show a slight improvement from October, as select manufacturers have been able to modestly boost inventory and sales, as chip woes ease and supply-chain issues begin to uncoil.

“The market is stuck in low gear,” Cox Automotive senior economist Charlie Chesbrough said in a press release. “We believe there are potential buyers out there, but many are waiting on the sidelines, put off by limited selection and high prices.”

New-vehicle sales are forecast to grow by about 4,000 units from October, or 0.4%, and reach 1.05 million, according to Cox Automotive.

Volume is seen falling more than 12% from last year, or nearly 150,000 units.

November’s seasonally adjusted annual rate of sales is expected to be 13.4 million, up from October’s chip-constrained 13 million, but down from last November’s 15.9 million.

“This scarce inventory is being met with powerful demand that continues to maintain prices — and profit per unit sold — at record levels,” said J.D. Power’s president of data and analytics, Thomas King, in a statement. “Average transaction prices are expected to reach a November record of $44,043, a sixth consecutive month above $40,000, and 18.1% higher than in November 2020 when prices hit $37,284.”

General Motors

Estimate: General Motors’ November U.S. auto sales are seen coming in at 154,096 vehicles, according to TrueCar forecasts. That would be a 27.5% year-over-year drop, but a 15.7% increase from October.

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Morgan Stanley analyst Adam Jonas expects GM’s electric vehicles to make up a growing share of its sales in the years to come. Jonas said in a note to clients Nov. 30 that he sees GM’s EV unit sales reaching 114,000 in fiscal 2022 (excluding China mini-vehicle, accounting for 1.7% of GM volume), 600,000 units in fiscal 2025 (9.9% of volume) and 1.845 million units by fiscal 2030 (34.8% of volume).

Results: General Motors does not release monthly U.S. auto sales anymore, only reporting quarterly figures. So investors will have to rely on various estimates of GM sales.

Stock: Shares rose 0.9% to 58.38 on the stock market today. GM stock broke out past a double-bottom-base handle buy point of 59.44 in early November. Shares rose to 65.18, but have now retreated from that advance.

GM’s relative strength line is trending lower after rallying from September lows to early November. That reflects GM stock’s recent underperformance vs. the s7p 500 index. Its RS Rating is 83 out of a possible 99, while its EPS Rating is 42.

Ford Motor

Estimate: Ford’s U.S. auto sales expected to reach 165,118 units, an 11% increase year over year, but a 5.4% decrease from October. Ford has actually reported a few months of sequential sales gains.

Jonas forecasts Ford EV sales reaching 150,000 units in fiscal 2022 (3.5% of Ford volume), 473,000 units in fiscal 2025 (11.5% of volume) and 1.235 million units by fiscal 2030 (33.7% of volume).

Jonas adds that through the first 10 months of fiscal 2021, Ford has sold 21,703 units of its all-electric Mustang Mach-E in the U.S., according to Motor Intelligence data. Through the same period, GM has sold a combined 24,810 units of its Chevy Bolt (EV and EUV).

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However, GM is not producing the Bolt EV and EUV for the remainder of the year as it continues to work through its recall of more than 141,000 units for potential battery fire risk.

Results: Check back later.

Stock: Shares gained 3.7% to 19.91. Ford stock raced past a cup-base 16.55 buy point on Oct. 21, according to MarketSmith. Shares are now extended and have been consolidating for the past few weeks. The relative strength line for Ford stock is near multi month highs. Its RS Rating is 97, and its EPS Rating is 37.

Toyota Motor

Estimate: Toyota Motor (TM) units sold in the U.S. are expected to reach 165,367, a 19.5% year-over-year decline, but a 12.7% increase from October.

Results: Check back later.

Stock: Toyota stock rose 1.4% to 180.40, extending a retreat below its 50-day line. Its relative strength line is trending downward. Toyota’s RS Rating is 80, while its EPS Rating is 81.

Volkswagen Group

Estimate: November U.S. auto sales are seen reaching 44,477, down 13.5% from November 2020, and 0.7% lower than October.

Results: Check back later.

Stock: U.S.-listed shares of Germany’s Volkswagen (VWAGY) popped 6% to 29.52, even as the automaker said it should start to see production slowly rise. VWAGY stock is at eight-month lows, below its 50- and 200-day lines.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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