Global OEM performance: West outperforms East for a change

by SR on May 14, 2012

China related-autos slump, Peugeot & Fiat have dead-cat bounce

Global OEM share price performance year-to-date in 2012 (native currency base)
I have updated the share price performance figures for the 30 or so auto OEM stocks that I track. The charts show relative performance over the past year; since the Japanese market bottomed in November 2011 (forgive me – the Japan market is still the centre of my world); year-to-date since the beginning of calendar 2012; over the past three months; since the start of the current month.

These charts are there mostly for reference, based on my view that it’s difficult to think about where global auto OEM and auto parts stocks are going to go if you don’t have a firm handle on where they’ve already been.

In the very short term – i.e. over the past week – Peugeot has had a bit of a rally, rising 6%. However, that still leaves Peugeot’s share price a stunning 72% lower than its price of 1 year ago… Fiat’s stock also rose over the past week but it too has had dismal performance over the past 12 months, having fallen by 51% over that time. Since our last update a week ago GAC and BYD have been big movers in the opposite direction to Fiat and Peugeot, falling more than 10% each over the week. The decline in the Hang Seng can’t have helped, but still. Moreover, Brilliance, Great Wall and Dongfeng all posted noticeable declines during the week. Clearly China autos remain out of favour; the question is how long that will continue and at what level these stocks become buys.

My view is unchanged: Japan auto OEMs like Toyota and Honda are going to have a thunderous year and auto parts suppliers such as Denso and Aisin Seiki will benefit. You should take a look at these stocks.

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