Auto Stock Roundup: Vehicles Launched at Auto Show, GM Sued by Arizona

The Los Angeles Auto Show started today, which resulted in announcement and unveiling of various new vehicles by automakers over the week. The move toward eco-friendly vehicles gained momentum as Toyota Motor Corp. (TM) introduced its first fuel-cell vehicle (FCV.V) and Honda Motor Co., Ltd. (HMC) revealed a new FCV concept car.

Meanwhile, General Motors Co. (GM) faced yet another ignition switch recall-related lawsuit, this time by the state of Arizona. This could spell major trouble for the automaker if other states follow suit. Meanwhile, Tata Motors Limited’s (TTM) earnings declined from the prior-year quarter, even though revenues improved.

(Read last to last week’s recap here: Auto Stock Roundup: GM Recall Trouble Deepens, Weak Ford China Sales.)

Recap of the Week’s Most Important Stories

1. Numerous vehicles were unveiled at the Los Angeles Auto Show that started today. These include Toyota’s Lexus LF-C2 concept and Scion iM Concept, Ford Motor Co.’s (F) new Ford Explorer and new Shelby GT350 Mustang (Read more: Ford Confirms the Launch of New Shelby GT350 Mustang), General Motors’ Chevrolet Colorado ZR2 Concept, Chevrolet Chaparral 2X Vision Gran Tursimo concept, 2016 Cadillac ATS-V sedan and coupe and Cadillac ATS-V.R and Honda’s 2016 Acura ILX sports sedan, among others.

2. Honda’s shares gained 0.44% on Nov 18, a day after the automaker unveiled the Honda FCV CONCEPT and the Honda Power Exporter CONCEPT. As the name suggests, the Honda FCV CONCEPT is a concept car for a new FCV that will succeed Honda’s previous FCV, the FCX Clarity.

Meanwhile, the Honda Power Exporter CONCEPT is a concept model for an external power feeding device that enables AC power output from the FCV with maximum output of 9 kW. The FCV to be developed, based on the Honda FCV CONCEPT, will be a five-seat sedan. It is expected to be sold in Japan from Mar 2016, after which it will be introduced in the U.S. and European markets. (Read more: Honda Unveils New Fuel Cell Concept Vehicle, Shares Rise.)

3. Toyota introduced its new FCV, Toyota Mirai, which will be sold in Japan from Dec 15, 2014. In addition, the automaker will be launching the FCV in the U.S. and Europe by mid-2015. (Read more: Toyota to Sell Fuel Cell Vehicle Mirai as of Next Month.)

4. The state of Arizona filed a lawsuit against General Motors for hiding the ignition switch defect and delaying the recall, which put people’s life at risk. This is the first state to file such a suit, although General Motors is already facing ignition switch defect-related charges from vehicle owners and investors. Arizona has sought civil penalties of up to $10,000 per violation. Considering the immense number of vehicles involved, this could cost General Motors nearly $3 billion, if it loses the case.

5. Tata Motors’ earnings declined to INR10.21 per ordinary share (84 cents per American Depositary Share or ADS) for the second quarter of fiscal 2015 (ended Sep 30, 2014) from INR10.99 per share (89 cents per ADS) in the year-ago quarter. Consolidated revenues in the quarter increased 6.5% year over year to INR605.64 billion ($10 billion).

The improvement in revenues was attributable to an increase in wholesale volumes, better product mix and favorable market mix of Jaguar Land Rover. This was partially offset by the negative impact of weak operations and a sluggish economic environment in the standalone business. (Read more: Tata Motors Gains on Higher Sales, Earnings Fall Y/Y.)

Performance

Performance of auto stocks remained mixed in the last five trading sessions. Tesla Motors, Inc. (TSLA), which recorded the maximum gains in the prior week, lost the maximum, along with Honda this week. The decline in Tesla’s stock price was primarily due to lowering of 2014 and 2015 earnings expectations by Morgan Stanley (MS). Meanwhile, Ford recorded maximum gains in the last five trading sessions.

Honda lost the most in the last six months, while Tesla gained the maximum during the period.

What’s Next in the Auto World?

On Nov 26, Winnebago Industries, Inc. (WGO) will pay a quarterly cash dividend of 9 cents per share to shareholders of record on Nov 12. Meanwhile, the Los Angeles Auto Show will continue til Nov 30.

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