Shareholder returns among global automakers in the second quarter drooped in a down global economy, but U.S. publicly owned retailers and global suppliers handily outperformed most indexes.
The automakers' returns fell 4 percent on average, but the suppliers' rose 2.7 percent and the retailers' grew 3.1 percent, according to the Automotive News/PwC Global Automotive Shareholder Value Index.
The auto industry fared better when returns are viewed over longer periods. All three groups rose modestly over 12 months and remain solidly higher over three years. Over 36 months, the supplier and retailer returns have more than doubled while the automaker index is 70 percent higher.
The second quarter was rough in most major economies outside the U.S., especially in Europe. Shareholder returns for individual automotive companies reflected where they operate, said Jeff Zaleski, PwC partner for U.S. Automotive Transaction Services and a member of PwC's automotive leadership team. "This is truly a global market and although the global market is growing, not all markets are equal," he said.
Continuing declines in Russian and Brazilian new-vehicle sales figure to dampen 2015 full-year returns for automakers and suppliers active in those markets, according to Autofacts, PwC's auto forecasting subsidiary.
But it's a different story in Asia. Autofacts sees growth in India and underlying strength in China outweighing a slowdown in Japan related to tax policy.
Most European auto markets are likely to improve after an apparent deal staving off a Greek financial meltdown. Meanwhile, the U.S. auto sector should stay strong in the second half, Autofacts forecasts.
The wild card in the U.S.? When will interest rates rise and by how much? The Federal Reserve has largely delayed raising rates until the U.S. economy improves.
A rising economy should increase consumer demand for autos, but interest rate hikes would hurt a capital-intensive industry by raising the cost of consumer auto loans, dealer floorplanning and automaker and supplier investments.