Tesla Motors, Inc. TSLA finally launched the Model 3, which created a buzz globally and pulled up the stock by 17% over the week. Meanwhile, U.S. light-vehicle sales figures for March improved 3.1% year over year but sales on a seasonally adjusted annualized rate (“SAAR”) basis declined.
Among the other noteworthy developments, Ford Motor Co. F announced investments in Mexico and South Africa, while Advance Auto Parts, Inc. AAP appointed a new Chief Executive Officer (CEO). Toyota Motor Corporation TM announced a collaboration with Microsoft Corporation MSFT for delivering Internet connected car solutions.
Recap of the Week’s Most Important Stories
1. Tesla’s long-awaited Model 3 was unveiled in California amid massive fanfare on Mar 31. Model 3 is a four-door, five-seat electric sedan with a range of 215 miles per charge and acceleration of 0–60 mph in less than 6 seconds. It is equipped with Tesla’s Autopilot hardware, has both front and rear trunks, and is expected to obtain five-star safety ratings. The car will be produced from late 2017. Tesla opened bookings for Model 3 on the morning of Mar 31 and pre-orders crossed 276,000 units in the first three days (read more: 3 Key Takeaways from Tesla's Model 3 Launch).
2. U.S. light-vehicle sales increased 3.1% year over year to 1.6 million units in Mar 2016. Lower increase in retail sales led to a slowdown in sales growth. Consequently, SAAR declined to 16.56 million units in Mar 2016 from 17.53 million units in Feb 2016 and 17.14 million units in Mar 2015. This is the lowest SAAR since Feb 2015. Ford led in terms of sales volume for Mar 2016 (read more: U.S. Auto Sales Rise in March, SAAR Lowest Since Feb '15).
3. Ford announced two new investments this week. The first investment, amounting to $1.6 billion, will be used to build a new small car plant in Mexico. The second investment, totaling R2.5-billion ($170 million), will be used to expand operations at its Silverton Assembly Plant in Pretoria, South Africa. The investment will support the production of Ford Everest and Ford Ranger (read more: Ford to Invest $170M in South Africa for Everest SUV).
4. Toyota and Microsoft teamed up to accelerate telematics research, network security and data analytics for delivering Internet connected car solutions. The duo aims at adding wings to connected car services by combining computer and wireless technology to provide information, entertainment and real time traffic updates to vehicles in motion. Toyota has launched its data science hub for global operations in the form of a new company Toyota Connected, Inc. headquartered in Plano, TX. Toyota Connected plans to use Microsoft’s Azure platform to make driving more personal, perceptive and safer. The company stated that the initial investment will be $5.5 million (read more: Microsoft Teams Up with Toyota for Connected Car Services).
5. Advance Auto Parts has appointed Thomas Greco as CEO, effective Apr 11, 2016. He will replace the interim CEO, George Sherman, who will continue to be the President of the company. Greco will also become a director of Advance Auto Parts.
Most auto stocks recorded losses over the last week, led by Toyota. Tesla was the only stock among the ones listed below to record a gain over the week, driven by the positivity surrounding the launch of Model 3. The electric carmaker was also the biggest gainer over the last six months, while Honda Motor Co., Ltd. HMC lost the maximum.
Last 1-Week Period
Last 6 Months
What’s Next in the Auto Space?
A few automakers may report their China and Europe sales data for March in the coming week.
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