Will the U.S. auto market rebound? Most likely, according to data from Edmunds.com. Edmunds reported that 14.5 million cars and light trucks were sold in 2012, and predicts 15 million will be sold in 2013. Trucks are selling very well, with light duty trucks seeing 11.3% YTD growth, while cars are seeing 3.1% growth.
The rebound in the construction industry is boosting demand for pickup trucks, which is greatly benefiting Ford's F-Series. The Ford F-Series has sold 227,873 units YTD, which is 19.1% YTD growth, and it's the best-selling car/truck in the U.S. market right now (according to WSJ data). This is far outpacing the rest of the industry, and is largely due to the rebound in the construction industry.
Yet, even with this growth, Ford and General Motors are lagging the S&P 500 by 6% YTD. While plenty of naysayers will point toward massive losses in Europe, I'll point out the happy, positive things going on in the U.S.
In March, building permits were up 24% year-over-year and saw three months of consecutive gains. In the first three months of last year 165,800 building permits were issued, compared with 205,500 this year in the same period. That is a 12.3% increase, and is why pickup sales are so strong right now.
Chrysler's Dodge Ram has seen 23% YTD growth, and General Motors' Chevrolet Silverado has seen 23.5% YTD growth. As the U.S. housing market picks up steam, more contractors will upgrade their aging pickups, which will in turn boost U.S. GDP growth and fuel further housing gains.
While domestic auto makers have been doing well in the U.S., the big Japanese manufacturers have seen smaller gains. Toyota has seen 6.1% YTD growth in sales, and Honda has seen 6% growth. While this has helped compensate for the drop off in European registrations, it isn't enough to also compensate for China (due to the island territorial dispute, which caused Chinese consumers to shun Japanese products).
Import auto sales from these companies have fallen, while domestically-made Toyota and Honda cars and trucks have gone up. Import auto sales are down 10.6% and 26.3%, respectively, and domestically-made autos are up 9.1% and 14.9%, respectively. This is great news for our manufacturing base and for the patriots (like me) out there who want to see "Made in America" again.
Both players are seeing strong pickup sales growth, but their offerings aren't as robust as the American players, so they are missing out on the growth. This is similar to when Honda and Toyota offered better small and mid-sized cars a few years ago and stole away domestic market share from the Big Three.
The gains in the pickup industry have boosted the market share of the Big Three, at the expense of Toyota and Honda. Ford's market share increased from 15.2% to 16.5%, GM's increased from 18% to 18.5%, Chrysler's increased from 11.9% to 12.2%, but Toyota's decreased from 15% to 13.7%, and Honda's decreased from 10.3% to 10.2%.
Why? This was because of pickup sales, with each of the Big Three notching 0.4%-0.7% gains in market share in the truck market. As the construction industry continues to rebound, expect larger market share gains from the Big Three, at the expense of the now smaller Big Two (Toyota and Honda).
The naysayers, doomsayers, and "Debbie Downers" are all crying foul about the Big Three because of their exposure to Europe. But, look at the upside - U.S. auto sales are up, construction could be on the rebound, and the Big Three are gaining market share, while foreign auto makers are selling more domestically-made cars. Sometimes, the cup is half empty, but I see it half full.
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