When you are trading stocks online in the automobile sector, you need to realize that the performance of automotive stocks depends a lot on their product portfolio.
Ford's Mustang and General Motors' Camaro
Both Ford ($F) and General Motors ($GM) have iconic and quintessentially American sports cars in their product portfolio. Ford has the Mustang while General Motors manufactures the Camaro. The Camaro, however, has been doing slightly better than the Mustang in terms of sales.
Declining Mustang Sales Lead to Temporary Shut Down
Ford is realizing that an iconic sports car model with a rich history need not necessarily translate to great sales performance, especially when there are other factors such as:
- Strength of competing models, and
- Lower gas prices that make pickup trucks and SUVs more attractive for consumers
These factors have affected Mustang sales to such an extent that Ford has temporarily shut down its Michigan Flat Rock Assembly Plant that manufactures the Mustang and the Lincoln Continental. The shut down period is from October 10 to 17 during which the plant's 3,000-odd workers will continue to be paid. Now $F does have SUVs and pickups in its arsenal, but the Mustang sales dip does hurt.
Camaro Higher in Volume Sales
$GM has also experienced declining sales for its Camaro. But, crucially, it managed to outsell the equally iconic Ford Mustang in September. It's the first time this has happened since October 2014. While Camaro sales for September were 6,577, Ford managed to sell only 6,429 Mustangs which is a year-over-year decline of 32%. Year to day, volume sales for the Mustang have slipped year-over-year by 9%.
Year to date volume for the Camaro too have declined, by a more significant 11.3%. However, total incentives offered as part of the Camaro in September amounted to $3,409, while the incentives offered with Mustang totaled only $2,602. This is considered to be the defining factor for Camaro's higher volume sales.
Depreciation Levels for Ford and GM
$F has experienced a depreciation of 19.09% in the past 12 months, while $GM has only depreciated 2.63%. Ford's current dividend yield is 4.88%, while GM's dividend yield is 4.70%.
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