Incentives are boosting vehicle sales, but they're costing automakers profits and may keep stock prices jittery through 2002.
Automakers showed the smallest - albeit still healthy - increase in shareholder value during the first quarter.
The group posted an improvement of 12.4 percent, but it was the only industry segment with a 12-month decline, in this case 4.4 percent. Automakers were down 9 percent for the past three years. Automakers beat the key stock indices for the quarter but lag on a one-year and three-year basis.
Despite stronger-than-expected sales that were driven by incentives, uncertainty still surrounds the outlook for sales and profits for the rest of 2002. PricewaterhouseCoopers experts said automakers' share values will continue to fluctuate until that picture clarifies.
Among individual companies, the automotive group has a new value leader. Hyundai Motor Co. - which was added to the list this quarter along with Porsche AG, PSA/Peugeot-Citroen SA and Suzuki Motor Corp.- leads automakers with a 54.2 percent gain in the first quarter, a 144.3 percent improvement for the year and a 761.7 percent increase for the past three years.
"The Asian players have the cost advantage," PricewaterhouseCoopers partner Mike Burwell said.
The Big 3 continue to lose share to the Asians and Europeans, who increasingly are encroaching on their high-profit truck stronghold.
Despite a 5.6 percent first-quarter gain, Ford Motor Co. lagged the group for the year with a 39.1 percent drop. Fiat Auto S.p.A. was the only automaker with a first-quarter decline; the Italian automaker also had the worst performance over the past three years.