Shareholder value tumbles in 2nd qtr.
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Shareholder value fell in all automotive sectors in the second quarter as the pace of U.S. light-vehicle sales slowed and weakening sales overseas dimmed global prospects.
Stock values of global automakers fared worst, with their total return to investors dropping an average 12 percent in the quarter, according to the Automotive News/PwC Shareholder Value Index. Suppliers, especially those with heavy exposure in Europe, also suffered, falling an average 9 percent.
But PwC remains upbeat about the automotive sector for the rest of 2012, citing positive signs in all major world markets. For example, in Asia, PwC says monetary easing in key markets and Japanese and Thai recovery from 2011 natural disasters will boost auto output and shareholder returns. European debt is still a concern but "appears somewhat contained," PwC says.
"European suppliers will continue to struggle in 2012 with overcapacity and lower volumes," said Jeff Zaleski, PwC's automotive partner.
But the uncertainty and economic woes in overseas markets have depressed prospects for the U.S. new-vehicle market as well. That affected publicly owned auto retailers, sending their total returns down 8 percent in the second quarter.
Auto-related stocks had outperformed most major stock markets in the first quarter, but those same stocks were hit harder in the second quarter than most market indices.
The Dow Jones Industrials Index and the S&P 500 Index, for example, both lost about 3 percent in the three months ending June 30. London's FTSE 100 dropped 4 percent, and France's CAC slid 9 percent.
"Despite lower second-quarter returns, we are still optimistic that 2012 will be a good year for the global automotive industry," Zaleski said.
Automakers hammered
All publicly owned automakers lost ground in the second quarter. Among those falling the least, South Korea's Hyundai Motor Co. was down 1 percent, followed by drops of 4 percent for Germany's Volkswagen AG and 5 percent for China's SAIC.
The worst losses were concentrated among Europe-based automakers, plus General Motors and Ford Motor Co., both of which are weighed down by European operations they are restructuring.
Over a one-year period, automakers as a group did even worse, with average shareholder returns plunging 18 percent. Only Toyota Motor Corp. eked out a scant 2 percent gain.
Suppliers mixed
Automotive suppliers performed slightly better than their customers in the second quarter, with Asian parts makers generally doing the best.
Five suppliers returned gains to shareholders during the period. The top performers were Toyoda Gosei Co., up 17 percent, followed by Hankook Tire Co., up 7 percent, and Goodyear Tire & Rubber Co., up 5 percent.
Over the past year, only Japanese suppliers NHK Spring Co., Toyoda Gosei and Bridgestone Corp. were up, with the sector's shareholder value plunging an average 23 percent.
Retailers sag least
Shareholder value for publicly owned U.S. automotive retailers fell in the second quarter as U.S. auto sales eased after a torrid start to the year. The average total return to shareholders by the six companies in the index fell 8 percent. Only AutoNation Inc. posted a positive return, up 3 percent.
Over a one-year period, retailers as a group managed a modest 1 percent gain.
Over a three-year period, though, the sector average jumped 77 percent, with all retailers in the index posting double-digit gains.
Zaleski credits the retailer gains to "low interest rates, increased leasing, availability of credit and changes to the vehicle mix as consumers look for smaller, more fuel-efficient cars."
You can reach Jesse Snyder at jsnyder@crain.com.
