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Auto Roundup: MGA & STLA Buyout Deals, KMX Quarterly Results & More – Dec 27, 2022

Last week, the European Automobile Manufacturers Association released commercial vehicle registration data for November and the first 11 months of 2022. The European Union (EU) commercial vehicle market fell by 0.6% last month, marking the 17th straight month of decline. Truck sales improved year-on-year, while van and bus sales declined. Registrations in Germany and Spain increased by 14% and 0.9% respectively, while sales in France and Italy fell by 7% and 13.7%. In the first 11 months of 2022, EU commercial vehicle registrations fell by 15.5% to 1.5 million. Registrations fell in all major EU markets, with Spain witnessing the sharpest drop of 19.2%. Sales in France, Germany and Italy declined by 18.1%, 12.8% and 10.7% respectively year-on-year.

At the forefront of the news, America’s largest used car retailer, Carmax Co., Ltd. (KMX Free Report) announced quarterly results. Both revenue and profit were below expectations and declined year-on-year.automotive equipment providers Magna International (MGAMore Free Report) will revitalize its ADAS business with a $1.5 billion transaction to acquire the Veoneer Active Safety business.On the other hand, the car tycoon Stellantis (STLA Free Report) has announced plans to complete its acquisition of aiMotive and acquire a stake in Symbio.Electric Vehicle (EV) Behemoth Tesla (TSLA Free Report) garnered attention for boosting the year-end sales season by stepping up price cuts on the Model 3 and Model Y.Meanwhile, US legacy automakers general motors (GM Free Report) made headlines over the issue of the recall of 140,000 Chevrolet Volt EVs.

Last week’s top stories

Carmax reported net earnings per share of 24 cents per share for the third quarter of fiscal 2023 (ending November 30, 2022), amid lower-than-expected earnings across all segments, a Sachs consensus estimate of 58 lagging behind St. Net income was also down from his $1.53 per share recorded in the same period last year. The auto retailer said he posted $6.56 billion in revenue in the quarter ending November, which was below the Sachs consensus estimate of his $7.128 billion. The top line also contracted by 23.7% year-on-year.

As of November 30, 2022, the company had cash/cash equivalents and long-term debt of $688.6 million and $1,937.1 million, respectively. CarMax currently expects capital spending to be around $450 million for fiscal 2023, below his previous estimate of $500 million. As of November 30, 2022, there were $2.45 billion of stock repurchase authorizations remaining. The company opened his one new store in Oceanside, California in the third quarter. KMX — Holds Zachs Rank #3 (Hold) — Currently operates over 230 used car dealerships. Carmax aims to open 10 stores in 2023 and 5 stores in 2024.

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magna has entered into an agreement to acquire the Veoneer Active Safety business from SSW Partners to strengthen its Advanced Driver Assistance Systems (ADAS) business. This all-cash transaction is valued at over $1.5 billion. Subject to regulatory approvals and satisfactory terms, the transaction is expected to close by mid-2023. The acquisition is consistent with Magna’s go-forward strategy focused on increasing investments in high-growth areas. The transaction builds on Magna’s strengths in his ADAS business and aims to add complementary products to strengthen its portfolio, thereby making the company a leading full-service ADAS provider. We aim to

In particular, Veoneer Active Safety 2022 sales are expected to be approximately $1.1 billion, with an expected increase of approximately $1.9 billion by 2024. Combined with Magna, the business is expected to reach approximately $1.8 billion in 2022 and $3 billion in pro forma ADAS sales in 2022. 2024. The acquisition adds significant engineering and software resources and expands the company’s customer base and geographic footprint. MGA’s focus on augmenting his ADAS technology provides ample growth prospects.

Stellantis announced that it will acquire a stake in Symbio to accelerate the development of hydrogen mobility products as part of its Dare Forward 2030 plan. Symbio is a Michelin-based hydrogen company and a leader in fuel cell technology for the mobility industry. Stellantis CEO Tavares said: Subject to satisfactory closing conditions and regulatory approvals, the transaction is expected to close in the first half of 2023.

The company also announced the completion of its acquisition of aiMotive to revamp the autonomous vehicle game. aiMotive will operate as a subsidiary of Stellantis, further enhancing the company’s self-driving technology platform, STLA AutoDrive. Last week, Stellantis also announced that it will be ramping up production of his all-new M3 electric motor at its manufacturing plant in Tremery, France. Production capacity is expected to exceed 1 million electric motors per year by 2024. As part of Dare Forward 2030, Stellantis is targeting 100% of his passenger car sales in Europe to be electric by the end of his decade.

general motors recalls 140,000 Chevrolet Volt EVs due to fire risk in the U.S. and Canada. The recall comprises 120,000 Chevy Bolt EVs in the US and 20,000 in Canada. The recall addresses a potential post-crash fire risk deployed by front seat belt pretensioners. From 2017 he is eligible for 2023 model year vehicles. Dealers install metal foil along the carpet near the pretensioner exhaust. This is the second recall in December.

The recall came just days after the US auto giant drew attention by recalling more than 825,000 vehicles to fix headlight problems. Affected vehicles include 2022 and 2023 Cadillac Escalade, Chevrolet Silverado 1500, Chevrolet Suburban and Tahoe, GMC Sierra 1500 and GMC Yukon SUV, 2020-2023 Cadillac CT4 and CT5, 2021-2023 Includes Buick Envision up to 2020. Daytime running when the headlights are on, the company says the lights may not turn off, causing glare to other drivers and potentially increasing the risk of a collision. Dealers will update the software and owners will be notified starting January 23rd.

Tesla Doubled the discount on Model 3/Y cars. This is a sign that demand for EVs is starting to take a hit as rising interest rates, stubborn inflation and the growing risk of an economic slowdown are shattering consumer confidence. Last week, the EV giant increased the discount on its most popular models, the Model 3 and Model Y, to $7,500 from his $3,750 discount offered earlier this month. Real base prices for the Model 3 and Y are $40,690 and $59,690, respectively.

In addition to the discount, Tesla is also offering up to 10,000 miles of Supercharger credit to customers who receive delivery by December 31st. Despite lagging demand and reports of high inventories, the company appears poised to exceed production and shipment numbers in 2021. The holiday season is one of the busiest shopping seasons of the year. So this discount came at a perfect time. An unexpected year-end discount should help Tesla boost sales in the fourth quarter.

price performance ratio

The following table shows price changes for some major auto players over the past week and six months.

Zacks Investment Research
Image Source: Sachs Investment Research

What’s next for autospace?

Industry Watchers will monitor U.S. car sales data for December, Q4, and full year 2022.

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