Judging from the looks of it, the best way for an automotive company to raise its stock price this year is to be European, Asian, independent or reduce its exposure to General Motors.
The top performers in the first-quarter 2006 Automotive News /PricewaterhouseCoopers Total Shareholder Return Index fit those descriptions, except for Delphi Corp. Delphi, GM's primary parts supplier, saw a first quarter percentage jump in its deflated stock price as it worked through Chapter 11 bankruptcy protection.
The industry posted some hefty gains in the first three months of this year. Global automaker stock prices were up 12.0 percent on average. Global suppliers rose 9.8 percent on average, while the publicly traded U.S. auto dealership groups gained 11.1 percent.
Over the past 36 months, every automaker stock is up by double or triple digits - with the lone exception of GM's, which has declined in value more than 25 percent.
Italy's Fiat led the pack in the first quarter, posting a nearly 45.0 percent increase in shareholder value. The company also outperformed the industry for the past 12 months.
Fiat, which severed its financial ties to GM last year, ended 2005 with its first operating profit in 17 quarters. In the first quarter of 2006, its global market share has increased on the back of a European uptick in commercial-vehicle sales, including those of Fiat's Doblo van.
European investors reacted to reports that Volkswagen's pretax profits rose 58 percent in 2005, thanks to sales gains in Europe and South America.
Japan's Akebono Brake Industry Co. Ltd. topped the global supplier segment over the past 12 months with a 93.0 percent improvement. Like Fiat, Akebono also has distanced itself from GM, ending a U.S. partnership that depressed earnings last year. Big 3 supplier Tenneco Inc. has posted a gain of nearly 860 percent in shareholder value over the past three years. That is due partly to regaining its footing after a 2004 loss but is more reflective of Tenneco's strong gains in aftermarket sales.
Aftermarket activity helped the retailer segment leader, Group 1 Automotive Inc., deliver a 51.8 return for the first quarter. Group 1 said 72 percent of its 2005 profits came from parts and service, used cars, and finance and insurance products rather than new-vehicle sales.
By contrast, AutoNation Inc.'s share value declined for the quarter for two reasons. AutoNation's Florida stores were coping with the economic effects of Hurricane Wilma, and the company's volume is still heavily banking on GM and Ford Motor Co. At the beginning of 2005, AutoNation relied on GM and Ford for more than 35 percent of its vehicle sales. By the end of 2005, the two automakers delivered less than 30 percent of AutoNation's sales.
At Group 1, 14 of its 95 dealerships are GM.