Global auto stocks tumble in 3rd quarter
The European debt crisis and a sluggish U.S. economy sent global automotive stocks reeling in the third quarter, stifling the momentum generated in the first half of 2011.
Shareholder return for automakers and suppliers declined more than 25 percent in the third quarter. Publicly traded retail groups in the United States fared better, but the return for retailers still slipped 16.6 percent, the Automotive News/PwC Shareholder Value Index shows.
The index measures the change in value of an investment over the previous quarter, year and three years by including capital gains, share buybacks and dividends, and assumes that cash distributions are reinvested.
The third quarter was marked by volatility in global stock markets as investors reacted to the worsening European debt crisis and the prospect of a U.S. default during the debt ceiling debate in Congress.
U.S. new-vehicle sales also slowed in the third quarter on a weakening U.S. economy and shortages of Japanese vehicles.
"Economic and employment growth are the key to increased automotive sales" in 2012, said Jeff Zaleski, a partner in PwC Transaction Services.
In the 12 months that ended Sept. 30, returns for suppliers grew 4.5 percent and returns for global automakers increased 0.4 percent. Retailers posted a 31.7 percent gain during that period.
U.S. retailers also led three-year results with a 109.3 percent gain in shareholder value, while supplier returns grew 41.5 percent and automakers posted a 3.3 percent gain.
All but Suzuki
The index for global automakers dove 25.7 percent in the third quarter, worse than the S&P 500's negative returns in the period. Only Suzuki Motor Corp. created value for investors, eking out a 0.1 percent return.
Asian automakers outperformed their U.S. and European rivals as demand in China and India remained strong in the third quarter.
Nissan Motor Co., SAIC, Toyota Motor Corp., Hyundai Motor Co. and Honda Motor Co. all had double-digit percentage declines in value but managed to perform better than the automaker index.
European automakers fared the worst as the continent's debt crisis drove down share values, PwC said.
PSA/Peugeot-Citroen and Fiat S.p.A. posted third-quarter declines of more than 50 percent, while Renault and Daimler AG values fell by at least 40 percent. Volkswagen AG and BMW saw values dip by more than 30 percent.
Ford Motor Co.'s shareholder value fell 29.9 percent in the third quarter -- the best performance among European and U.S. automakers for the period.
Supplier returns fell 25.4 percent as only three parts makers in the index created shareholder value. Suppliers with heavy exposure in U.S. and European markets such as Continental AG, Faurecia S.A., TRW Automotive, Valeo S.A. and Meritor Inc. had big declines in shareholder value.
"These negative returns likely reflect, among other things, investor uncertainty in the broader markets and concerns over the debt crisis facing the U.S. and European nations," PwC said in a report.
All three suppliers that created value were Japanese: Calsonic Kansei Corp., Futaba Corp. and tire maker Bridgestone Corp.
Asian suppliers performed better than their U.S. and European counterparts in the third quarter. All Japanese and Korean suppliers outperformed the index. Lear outperformed the supplier index, but it posted a decline in value of more than 19 percent.
Retailers dip, but still best bet
Publicly held dealership groups posted smaller losses than automakers and suppliers.
AutoNation reported the smallest loss among U.S. retail groups with a 10.5 percent negative return for investors in the third quarter. Asbury Automotive Group followed with an 11 percent decline, while Group 1 Automotive fell 13.4 percent.
Penske Automotive Group was at the bottom of the heap among retailers with a 29.3 percent decline in shareholder return.
Unlike suppliers and automakers, retail stocks still yielded double-digit 12-month and triple-digit three-year returns for investors.
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