The Zacks Analyst Blog Highlights: Honda Motor, Toyota Motor, Ford Motor, General Motors and Nissan Motor

CHICAGO, June 3, 2011 /PRNewswire/ -- Zacks.com 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: Honda Motor Co. (NYSE: HMC), Toyota Motor Corp. (NYSE: TM), Ford Motor Co. (NYSE: F), General Motors Co. (NYSE: GM) and Nissan Motor Co. (OTC: NSANY).

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Here are highlights from Thursday's Analyst Blog:

Pricey Cars Curb Auto Sales

Auto sales in the U.S. dipped 3.7% on a year-over-year basis to 1.06 million vehicles in May, which is equivalent to an annualized rate of 11.8 million vehicles. It has touched the lowest rate in 8 months since 11.76 million vehicles recorded in September 2010. The decrease in sales was attributable to a rise in vehicle prices and a reduction in incentives, which could offset the impact of rising prices.

Pricing and Incentives

According to TrueCar.com, average transaction price for light vehicles in the U.S. rose $608 or 2.1% to $29,817 during the month under study, the highest since 2002. Honda Motor Co. (NYSE: HMC) and Toyota Motor Corp. (NYSE: TM) announced the maximum shoot up in prices of 2.6% and 1.6%, respectively from April . They were followed by Ford Motor Co. (NYSE: F) with an average price rise of 1.3% or $375 per vehicle from January this year.

According to Autodata Corp., average incentive spending on U.S. customers has been reduced by 19% to $2,303 per vehicle during the month, which is the lowest in more than half a decade.

Among the U.S. automakers, Ford's average spending on discounts and promotions fell 20% to $2,432, while General Motors Co. (NYSE: GM) reduced incentives by $648 or 17% to about $3,085 per vehicle. On the other hand, Chrysler Group LLC lowered incentive spending by 18% to $3,002 per vehicle.

Among the Japanese automakers, Toyota reduced incentive spending by $515, or 27% to an estimated $1,408 per vehicle, Honda lowered incentives by 29% to $1,513 per vehicle and Nissan Motor Co. (OTC: NSANY) slashed discounts by 28% to $2,247 per unit.

U.S. Automakers Totter

Sales at GM slipped 1% to 221,192 vehicles, driven by lower fleet volumes. Fleet sales ebbed 16% during the month as rental volumes dropped. However, retail sales increased 9% in the month. Sales of passenger cars went up 13%, but crossover sales and pickup sales fell 1% and 14%, respectively.

Ford reported flat sales of 92,102 vehicles in May compared with 192,253 vehicles a year ago. Meanwhile, sales at Chrysler rose 10% to 115,363 vehicles on the back of strong sales of "refreshed" 2011 models and Jeep brand.

Japanese Automakers Hit Hard

Toyota posted a 33.4% fall in sales to 108,387 vehicles. Sales of its best-selling Camry brand declined 35.7% to 18,830 vehicles while its total light truck sales dipped 26% to 51,468 units.

Honda's sales shrank 22.5% to 90,773 vehicles. The company's total car sales decreased 29.5% to 48,278 units and truck sales declined 12.7% to 42,495 units. Sales of Honda's best-selling Civic model ebbed 35.6% to 18,341 units, while sales of the Fit rose 35.1% to 5,921 units.

Nissan reported a 9.1% fall in sales to 76,148 units during the month under study. Nissan Division sales went down 7.8% to 69,759 vehicles while sales of Infiniti vehicles fell 21% to 6,389 units.

Other Automakers Sales

Sales at Daimler AG, including Mercedes-Benz (cars, light trucks and Sprinter) and smart vehicles, rose 4.7% to 20,798 vehicles. Sales of Mercedes-Benz increased 1.8% to 18,886 vehicles, while sales of smart USA fell 29.2% to 492 units.

Sales at Hyundai Motor Co. surged 21% to an all-time record of 59,214 vehicles, mainly driven by higher sales (104.5%) of newly redesigned Elantra. Meanwhile, sales at Kia Motors, Hyundai's sister company, shot up 53.4% to 48,212 vehicles led by galloping sales of Sorento (46%) and Soul (82%).

Our Take

Given the surging gas prices and rebound in consumer confidence we expect to see an inclination towards smaller and fuel-efficient vehicles. However, lack of sales incentives would surely keep the consumers away from the showrooms in the face of a troubled economy. Moreover, supplies of many highly sought after vehicles, particularly the fuel-efficient ones, would be restrained on the back of earthquake and tsunami in Japan, which led to a parts shortage.

Despite these, both GM and Ford forecasted their sales in the range of 13 million and 13.5 million cars and trucks. However, industry-wide sales are projected to fall within 13 million units.

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