Global Equity Research - Prudential Financial€“ Costs of new models exceeding those they...
Transcript of Global Equity Research - Prudential Financial€“ Costs of new models exceeding those they...
Global Equity ResearchGlobal Equity Research
Automotive Industry Automotive Industry CoverageCoverage
Michael Bruynesteyn Michael Bruynesteyn (Senior)(Senior)(212)778(212)778--13231323
John Tomlinson John Tomlinson (Associate)(Associate)(212) 778(212) 778--44714471
Takuo Katayama (Associate)Takuo Katayama (Associate)212212--778778--84138413
[email protected] u n e 3 , 2 0 0 2
Global Equity ResearchGlobal Equity Research-- AutomotiveAutomotiveMichael Bruynesteyn (212) [email protected]
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Key ThemesKey Themes• Structural/demographic changes bode well for demand
– 16.5 million forecast for ’02 US light vehicle sales– Boomers moving into peak buying years, likely to buy/lease high-end vehicles– Pricing lowest in 20 years, may be influencing scrappage rates
• Big Three’s unprecedented market share loss in U.S translates to continued pressure on capacity utilization, incentives and margins
– Capacity rationalization restricted by limited production flexibility
• Mix shifting to trucks, helping domestics’ profits until transplants/imports catch up– Definition of “truck” is broadening to include crossovers like P/T Cruiser, RX300– Transplants & imports increasing truck penetration quickly, likely to pressure profits
• Eventual interest rate increases likely to depress valuations
• Valuations generally ahead of mid-cycle forecasts due to high 1H02 production
• Industry Risks: extended recession, regulation, new transplant capacityThesis Risks: 17m+ SAAR in ’02, extended low rate environment, Big 3 share recovery
à CONCLUSION: CAUTION RECOMMENDED, NO OVERWEIGHTING
Global Equity ResearchGlobal Equity Research-- AutomotiveAutomotiveMichael Bruynesteyn (212) [email protected]
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Boomers Entering Peak Buying Years
0
20
40
60
80
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120
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200
<25 25-34 35-44 45-54 55-64 65+
`98 V
ehic
les
Sal
es/
(000s)
Hou
sehol
ds
0
5
10
15
20
25
Hou
sehol
ds
by
age
of h
ouse
hol
der
(mil)
Buying propensity by age group (left) Households by age of householder (right)
Boomer Bulge
Boomers About to Buy More Expensive Vehicles
$14,000
$16,000
$18,000
$20,000
$22,000
$24,000
$26,000
$28,000
$30,000
<25
25-3
4
35-4
4
45-5
4
55-6
4
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+
New
Veh
icle
Pri
ces
by
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Bra
cket
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15
20
25
Hou
sehol
ds
by
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of h
ouse
hol
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(mil)
Average Transaction Price (left) Households by age of householders (right)
Boomer Bulge
Source: CNW , Prudential Securities Inc. estimates
Rising Leasing Penetration Has Reduced Volatility And Improved Mix
0%
5%
10%
15%
20%
25%
30%
35%
1984
1985
1986
1987
1988
1989
1990
1991
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1994
1995
1996
1997
1998
1999
2000
2001
E20
02E20
03E
Leas
ing
Shar
e of
Lig
ht V
ehic
le M
arke
t Passenger CarsLight Trucks
Structural Changes Support Extended Sales Cycle & Richer MixStructural Changes Support Extended Sales Cycle & Richer Mix
Source: Bureau of Economic Analysis
Caveat: Low end purchasers reverting to used high end vehicles
CPI For New Vehicles Leveled Out In 1997
40
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CPI
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New
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icle
s
Source: CNW and Prudential Securities, Inc. estimates Source: CNW
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10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
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20.0
1980
1981
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*19
9719
9819
9920
0020
0120
02E
2003
E
US
Annual
Sal
es V
olum
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illio
ns)
10%
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35%
40%
45%
US
Mar
ket
Sh
are
(Dom
esti
c B
ran
ds)
US Light Vehicle Sales GM%
Ford% Chrysler%
Big 3 Market Share Declines Show No Sign Of ReversalBig 3 Market Share Declines Show No Sign Of ReversalTransplants/Imports have better quality, strengthening brands and opportunities to grow into new segments
Source: Autodata
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Typical Downturn Pattern For Incentives & Utilization Not Seen ITypical Downturn Pattern For Incentives & Utilization Not Seen In 01/02n 01/02
30%
40%
50%
60%
70%
80%
90%
1980
1981
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E
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E
Cap
acit
y U
tiliz
atio
n -
Lt.
Veh
icle
/ N
A B
ig 3
Mkt
. Shr
.
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Incen
tives as % of R
evenu
e
Capacity Utilization - Autos andlight trucks
Big 3 Market Share
Incentives (right axis)
Prior Two Recessions in the US resulted in
all-time high incentives and all-time
low capacity utilization.
Source: Autodata and Federal Reserve
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New Transplant Capacity Offsets Domestics’ ReductionNew Transplant Capacity Offsets Domestics’ ReductionUnits In (000's)
2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007
Est. Est. Capacity Est. Capacity Est. Capacity Est. Capacity Est. Capacity Est. CapacityCapacity Capacity Change Capacity Change Capacity Change Capacity Change Capacity Change Capacity Change
General MotorsTotal North American GM Light Vehicle 6,105 6,205 1.6% 6,205 0.0% 5,600 -9.8% 5,465 -2.4% 5,640 3.2% 5,195 -7.9%
Ford Motor CompanyTotal North American Ford Light Vehicle 4,941 4,866 -1.5% 4,781 -1.7% 4,300 -10.1% 4,025 -6.4% 3,890 -3.4% 3,915 0.6%
DaimlerChryslerTotal NA DaimlerChrysler Light Vehicle 3,513 3,380 -3.8% 3,360 -0.6% 3,430 2.1% 3,387 -1.3% 3,350 -1.1% 3,395 1.3%
BMW of North AmericaTotal Bmw 150 160 6.7% 155 -3.1% 155 0.0% 155 0.0% 155 0.0% 155 0.0%
Honda of America/Honda of CanadaTotal Honda 1,070 1,175 9.8% 1,255 6.8% 1,285 2.4% 1,400 8.9% 1,450 3.6% 1,450 0.0%
Renault/NissanTotal Nissan 750 815 8.7% 940 15.3% 1,070 13.8% 1,065 -0.5% 1,065 0.0% 1,065 0.0%
Fuji HeavyTotal Fuji Heavy 120 120 0.0% 120 0.0% 120 0.0% 135 12.5% 135 0.0% 135 0.0%
HyundaiTotal Hyundai 85 150 76.5% 180 20.0%
SuzukiTotal CAMI 110 80 -27.3% 65 -18.8% 0 -100% 0 0 0
Toyota Motor Mfg.Total Toyota 905 945 4.4% 1,075 13.8% 1,125 4.7% 1,230 9.3% 1,275 3.7% 1,325 3.9%
New United Motor Mfg. Inc. (NUMMI)TOTAL NUMMI 365 365 0.0% 365 0.0% 365 0.0% 365 0.0% 365 0.0% 365 0.0%
Total Toyota, Including NUMMI 1,270 1,310 3.1% 1,440 9.9% 1,490 3.5% 1,595 7.0% 1,640 2.8% 1,690 3.0%
Volkswagen de MexicoTotal Volkswagen 420 420 0.0% 420 0.0% 420 0.0% 545 29.8% 610 11.9% 610 0.0%
Total All North American Light Vehicle Production Capacity
Total NA Light Vehicle (000's) 19,719 19,841 0.6% 20,181 1.7% 19,360 -4.1% 19,452 0.5% 19,725 1.4% 19,480 -1.2%
Source: 2002 CSM Worldwide- North American Light Vehicle Forecast and Prudential Financial estimates.
Calendar Year
0.3m unit net reduction 01-05
1.7m unit reduction
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Industry Truck Mix Continues to Rise…Industry Truck Mix Continues to Rise…Transplants and Imports Close Gap on Big ThreeTransplants and Imports Close Gap on Big Three
0%
10%
20%
30%
40%
50%
60%
70%
80 CY 81 CY 82 CY 83 CY 84 CY 85 CY 86 CY 87 CY 88 CY 89 CY 90 CY 91 CY 92 CY 93 CY 94 CY 95 CY 96 CY 97 CY 98 CY 99 CY 00 CY 01 CY
Truc
k M
ix %
Big Three Truck Mix % US Industry Truck Mix % Transplant/Import Truck Mix
Source: Autodata
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Automakers and Autoparts Indices Respond To Fed Funds Rate
50.000
150.000
250.000
350.000
450.00030
-Dec
-198
3
28-D
ec-1
984
27-D
ec-1
985
26-D
ec-1
986
25-D
ec-1
987
23-D
ec-1
988
22-D
ec-1
989
21-D
ec-1
990
20-D
ec-1
991
18-D
ec-1
992
17-D
ec-1
993
16-D
ec-1
994
15-D
ec-1
995
13-D
ec-1
996
12-D
ec-1
997
11-D
ec-1
998
10-D
ec-1
999
08-D
ec-2
000
07-D
ec-2
001
Inde
x V
alue
s *
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Fede
ral F
unds
Rat
e
Autoparts Index Automakers Index Fed Funds Rate
* Index Values based on Total Return of Investment with Dividends Reinvested on Pay Date.
1. Fed lowers rates …….2. Auto/Parts stocks rally
1. Fed raises rates …….2. Auto/Parts stocks plunge.
Source: Prudential Securities, Inc estimates
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Fw
d P
/E M
ult
iple
Automaker Fwd Multiple Auto Parts Suppliers Fwd Multiple
MID-CYCLE PERIOD (1994-1998)
AUTOMAKERSAvg.: 8.5 times
AUTO PARTS SUPPLIERS
Avg.: 10.0 times
US Automakers’ and Parts Suppliers’ Forward P/E RatiosUS Automakers’ and Parts Suppliers’ Forward P/E Ratios
Source: Factset Systems
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Stocks: F, GM, DCXStocks: F, GM, DCX
•• Group:Group:– Lifted by falling interest rates thru end ‘01. Eventual uptick in rates in ’02 should hit valuations.– Muted upside as market share driven revenue pressure cannot be fully offset by cost cutting
•• DaimlerChrysler (DCX):DaimlerChrysler (DCX):– Chrysler breakeven likely in ’02, but ‘02 & ‘03 product rollout very light so further upside limited– Mercedes-Benz and Commercial Vehicles 2002 performance improvement also a challenge
•• General Motors (GM):General Motors (GM):– ’02 product slate strong; market share should remain flat. Mix weakening. Better flex than F and Chrysler.– Pension and healthcare issues (10% return expectation optimistic, healthcare costs growing faster than 6%)– Hughes deal: limited value to be unlocked. Fiat absorption possible before 1/04.
•• Ford (F):Ford (F):– Negative ‘02 mix, launches delayed, loss of 1.1 points of market share in U.S. during 2001, expecting 200 bp in
‘02. Luxury brands down despite Jag and Land Rover gains– Trimming assets like foundries, transmissions, Kwik-Fit. $1 billion divestitures planned for ’02.– Large restructuring Jan. 02. Several years to implement improvements, held back by weak flex, choppy cadence– Costs of new models exceeding those they replaced (Explorer, Expedition, F150, Windstar) w/o pricing recovery
Prudential Securities Automaker CoveragePrudential Securities Automaker Coverage
Sell
Hold
Hold
Market Perform
Global Equity ResearchGlobal Equity Research-- AutomotiveAutomotiveMichael Bruynesteyn (212) [email protected]
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Stocks: JCI, DCN, DPH, LEA, GNTX, SUP, VCStocks: JCI, DCN, DPH, LEA, GNTX, SUP, VC
•• Group:Group:– Rallied in 1H02 on strong OEM production– Longer term investments: look for good cash flow, growth through penetration and outsourcing despite falling
domestic OEM production, and pricing power in face of pressure from OEMs•• Dana (DCN):Dana (DCN):
– 2002 and 2003 FCF yield low given high debt/capital. Key ops depressed. Over-diversification hurts focus– No end in sight to restructuring (charges 5 years in a row).
•• Delphi (DPH):Delphi (DPH):– Cost cuts visible, portfolio transformation slow (related restructuring costs to continue), still 65% GM exposed.
Strong management•• Gentex (GNTX)Gentex (GNTX)
– Trading near top-end of its range. Big mid-2001 program wins delivering growth, 2002 boost likely from exterior mirrors, announcement in June/July
•• Johnson Controls (JCI)Johnson Controls (JCI)– Strong ROIC, solid cash flow, declining debt, lowest exposure to Big 3 among major suppliers– 2002 backlog light but later years strong
•• Lear (LEA):Lear (LEA):– ROIC > cost of capital, good order backlog, strong cash flow, declining debt, solid management – Free cash flow yield impressive given improvements in balance sheet
•• Superior (SUP)Superior (SUP)– Increasing share in expected flat to falling aluminum wheels market. Growth muted. Strong cash flow & ROIC
•• Visteon (VC)Visteon (VC)– Waiting for cost reductions to take hold. Management has not yet delivered on cost savings promises
Prudential Securities Auto Supplier CoveragePrudential Securities Auto Supplier Coverage
Market Perform
Hold
Hold
Hold
Hold
Hold
Sell
Hold
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Automaker Comps SheetAutomaker Comps SheetMarket Est US
% Chg. Price % To 52 Week Cap ($Bil) 02 Mkt `01E P/E Rel. `02E P/E Rel.Ticker Rating YTD 6/5/02 Target Target High Low 6/5/02 Share 1999 2000 2001 2002E 2003E 2000 2001 2002E 2003E to S&P 500 to S&P 500
General Motors GM Hold 22.3% $59.5 $55 (7)% $68.2 $39.2 $36.5 27.7% $8.62 $8.58 $3.57 $5.19 $6.25 6.9 16.6 11.5 9.5 68% 56%Ford Motor F Sell 7.6% $16.9 $12 (29)% $26.2 $13.9 $31.7 19.7% $3.10 $3.26 -$0.43 -$0.20 $0.77 5.2 N/A N/A 21.9 N/A N/ADaimlerChrysler * DCX Hold 13.0% $47.1 $40 (15)% $50.9 $25.6 $51.4 13.0% $6.19 $3.24 $0.65 $1.85 $3.12 14.5 72.9 25.4 15.1 299% 125%
6.15€ 3.45€ 0.73€ 2.11€ 3.54€
Group 14.3% $120 60.4% 8.9 44.8 18.4 15.5 184% 91%S&P 500 .SPX (8.0)% 1,055.8 1,287 945 $50.82 $55.12 $43.30 $52.00 $58.00 19.2 24.4 20.3 18.2
Nasdaq Composite COMP-O (19.9)% 1,562.6 2,265 1,387
Dow Jones Indu. .INDU (0.7)% 9,946.8 11,197 8,062
Group Relative to S&P 500 22.4% 85%
Dividend EPS EPS P/E 2Q PRU 2001 2002E 2003E 2001 2002E 2003E 2001 2002E 2003E $/Year Yield 2002E 2003E 2001 2002E 2003E 2002E 2003E 2003E EPS 2Q EPS
General Motors 0.33 0.39 0.38 5.3 5.2 4.9 6.0% 7.1% 7.6% $2.00 3.4% 5.4% 3.6% 71.6% 72.4% 69.9% $5.30 $6.61 9.0 $2.14 $2.20
Ford Motor 0.23 0.22 0.22 2.8 5.8 3.9 2.6% -2.3% 7.6% $0.40 2.4% -12.8% -5.1% 78.6% 75.7% 75.1% $0.20 $0.92 18.5 $0.25 $0.26
DaimlerChrysler** 0.35 0.38 0.36 6.1 5.7 4.6 -1.2% 3.7% 5.7% $0.94 2.0% -2.2% 0.6% 34.2% 38.4% 36.9% $2.25 $3.00 15.7 $0.69 $0.63
Group 0.3 0.3 0.3 4.7 5.6 4.4 2.5% 2.8% 7.0% 1.11$ 2.6% -3.2% -0.3% 61.4% 62.2% 60.7% 14.4
S&P 500 16.69 1.6% $52.00 $58.00 18.2
Group Relative to S&P 500 — — — — — 1.0% 79%
Source: Company reports, Prudential Securities estimates, prices as of
Earnings Per Share P/E
Firm Valueto Sales
Free Cash Flow Yield
First Call Mean Data(Adjusted)
Market Perform
Debt/Cap
*Note: DaimlerChrysler is not included in the S&P 500. **Note: DaimlerChrysler dividend is converted to USD at the current exchange rate.
6/5/02 9:24 AM
Firm Valueto EBITDA
Rtn on CapitalEmployed
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Auto Parts Comps SheetAuto Parts Comps Sheet
Market
% Chg. Price % To Cap ($Bil) `01E P/E `02E P/ETicker Rating YTD 6/4/02 Target Target High Low 6/4/02 1999 2000 2001 2002E 2003E 2001 2002E 2003E Rel. to S&P 500
GM F DCXDana Corp. DCN Hold 48.1% $20.6 $14 (32)% $26.90 $10.25 $3.3 8% 18% 11% $4.08 $2.47 $0.08 $0.89 $1.38 244.7 23.2 14.9 1003% 114%Delphi Automotive DPH Hold 12.4% $15.4 $13 (15)% $17.50 $9.50 $9.3 65% 0% 0% $1.95 $1.94 $0.40 $0.82 $1.23 38.5 18.6 12.5 158% 92%Gentex Corp. GNTX Hold 12.6% $30.1 $31 3% $34.23 $20.00 $2.4 40% <10% 20% $0.86 $0.93 $0.86 $1.01 $1.22 35.0 29.9 24.6 144% 147%Johnson Controls JCI Hold 7.1% $86.5 $90 4% $93.20 $54.90 $8.0 14% 11% 14% $4.15 $5.09 $5.79 $6.10 $6.51 14.9 14.2 13.3 61% 70%Lear Corp. LEA Hold 16.6% $44.5 $51 15% $53.84 $22.60 $3.2 28% 32% 13% $3.78 $4.20 $2.45 $4.20 $4.80 18.1 10.6 9.3 74% 52%Superior SUP Sell 11.8% $45.0 $39 (13)% $53.80 $28.00 $1.3 47% 44% $2.62 $3.04 $2.10 $2.58 $2.93 21.4 17.4 15.4 88% 86%Visteon Corp. VC Hold 5.9% $15.9 $13 (18)% $21.72 $10.45 $2.1 0% 84% $2.16 $2.79 $0.02 $0.13 $0.58 1,038.8 (n/a) 27.4 4260% (n/a)
Group 16.4% $29.67 201.6 19.0 16.8 827% 93%
S&P 500 .SPX (8.0)% 1,056 1,286.6 945.1 50.82 55.12 43.3 52 58 19.2 24.4 20.3
Nasdaq Composite COMP-O (19.9)% 1,563 2,265 1,387
Dow Jones Indu. .INDU (0.7)% 9,947 11,197 8,062
Group Relative to S&P 500 24.4%
Free Cash Flow Adjusted First Call Mean Data Dividend Yield EPS EPS P/E EPS PRU June
2001 2002E 2003E 2001 2002E 2003E 2001 2002E 2003E $/Year Yield 2002E 2003E 2001 2002E 2003E 2002E 2003E 2003E JuneQ02 02 EPS
Dana Corp. 0.55 0.53 0.49 9.7 7.4 6.3 2.5% 5.9% 6.7% $0.04 0.2% 1.5% 7.2% 64.4% 71.9% 67.7% $0.93 $1.66 12.4 0.34 $0.32
Delphi Automotive 0.57 0.55 0.52 8.1 6.9 5.7 5.5% 7.9% 9.6% $0.28 1.8% 6.5% 9.1% 75.6% 74.8% 72.8% $0.84 $1.25 12.3 0.36 $0.35
Gentex Corp. 6.99 5.82 4.75 22.3 18.1 14.9 14.8% 14.7% 15.2% NA --- 2.1% 2.8% 0.0% 0.0% 0.0% $1.02 $1.21 24.9 0.25 $0.25
Johnson Controls 0.53 0.51 0.46 6.1 6.4 5.7 22.4% 21.1% 19.7% $1.32 1.5% 4.7% 5.6% 37.9% 38.1% 37.5% $6.19 $6.83 12.7 1.79 $1.72
Lear Corp. 0.41 0.38 0.35 5.7 5.4 4.9 12.2% 13.0% 12.2% NA --- 8.0% 11.3% 63.8% 57.4% 50.3% $4.16 $5.04 8.8 1.14 $1.13
Superior Industries 1.76 1.47 1.22 9.9 7.9 5.8 12.4% 14.0% 15.7% $0.50 1.1% 4.9% 5.4% 0.0% 0.0% 0.0% $2.64 $3.44 13.1 0.70 $0.73
Visteon Corp. 0.26 0.28 0.25 5.9 6.1 4.6 8.9% 0.8% 0.9% $0.24 1.5% 2.8% 6.6% 57.7% 58.7% 58.8% $0.43 $0.96 16.6 0.50 $0.46
Group 1.6 1.4 1.1 9.7 8.3 7.0 11.3% 11.1% 11.4% $0.48 1.2% 4.4% 6.9% 14.4
S&P 500 16.69 1.6% $52.00 $58.00 18.2
Group Relative to S&P 500 79%
Source: Company reports, Prudential Securities estimates, prices as of
Market Perform
Firm Valueto Sales
Firm Valueto EBITDA
P/EEarnings Per Share 52 Week
6/4/02 8:10 AM
Rtn on CapitalEmployed
Revenue
ExposureTo Big 3
Debt/Cap
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GM Has The Most Stable Cadence In 2001GM Has The Most Stable Cadence In 2001--20042004——Ford weak in 2002Ford weak in 2002
——Chrysler has a serious problem for 2002/2003Chrysler has a serious problem for 2002/2003
0%
5%
10%
15%
20%
25%
30%
35%
40%
Ford GM DCXC
adence*
Of
New
Vehic
le P
rogra
ms
* Volume for new models and major changeovers divided by annual
15%-20% Theoretical Ideal Range All Dodge Ram & Jeep Liberty
99 00 01 02 03 04 05 06 99 00 01 02 03 04 05 06 99 00 01 02 03 04 05 06
Source: CSM Worldwide
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North American Planned Vehicle Launches for Big 3North American Planned Vehicle Launches for Big 3CY 2000 CY 2001 CY 2002E CY 2003E CY 2004E CY 2005E
C (PT44): PT Cruiser & (MEX) C: (KJ) Jeep Liberty C: (SR/PR) Dodge Viper C: (CS) Chrysler Pacifica C: (NLH) Concorde C (EB74): Chrysler PT Cruiser
C (RS): T & C, Caravan, Voyager C: (DR/DE) Ram Pickup C: (HB) Durango C (W251): Mercedes Grand Sports Tourer C (KJ): Jeep Youth SUV
C (JR41/JR27) Stratus, Sebring & Conv. C(T1N): Freightliner Sprinter C: (T1N): Dodge Ram Van C: (NLH) 300N (replaces M) C: (PS24): Mitsubishi Eclipse
C: (PS45): Mitsubishi Montero Sport C (ND): Dodge Dakota C: (JT41,2): Mitsubishi Lancer
C (LX49): Dodge Sport Wagon
C: (PS41) Mitsubishi Galant
992,036 589,643 2,802 269,210 475,912 243,300 F (U207): Explorer Sport Trac F (U222/228): Expedition & Navigator F (J56A): Mazda 6 F (GT40): Ford GT40 F (CD338): Ford Taurus
F (P225): SuperCrew F (U152): Ford Explorer F (U231): Lincoln Aviator F (P221): F SuperCrew F (D258): Ford 500 F (F236): Lincoln LS
F (C1): Focus F (U152) Mercury Mountaineer F (V229): Windstar F: (S197) Mustang F: (P336) Ford Ranger
F (U204): Ford Escape F (BE91/B146): Ikon F (V229): Mercury Mariner F (D219): Ford Crosstrainer F (U251): Ford Explorer
F DEW 98: Thunderbird (M205) F (P221): F-Series F(CD338): Ford Compact Sedan
F (P225): Lincoln Blackwood F (U251): Mercury Mountaineer
F (P336): Ford Explorer Sport Trac
950,440 444,880 274,830 793,731 411,006 992,785 GM (X160/220/310):Aurora GM (T360): Trailblazer, Envoy, Bravada GM (GMT370): Chevrolet Trailblazer XL GM (GMX215): Cadillac XLR GM (GMX245): Chevrolet Corvette GM (GMX001): Chevrolet Cavalier
GM: (GMT880) Chev. Silverado/GMC Sierra GM (GMT805) Avalanche GM (GMT370): GMC Envoy XL GM (GMX357): Saturn Ion GM (GMT001): Cavalier Tall Wagon
GM (X310):Bonneville GM (257) Buick Rendezvous GM (GMT820): Hummer H2 SUV GM (GMT370): Isuzu Ascender GM (GMX381): Pontiac Grand Am GM (Epsilon): Saturn Sportback
GM (257) Pontiac Aztek GM (GMT825C): Cadillac Escalade GM (GMT610): Chevrolet Express GM (GMT305): GMC Equinox GM (GMX272): Cadillac DTS
GM (GMT806): Cadillac Escalade EXT GM (GMT610): GMC Savana GM (GMT830): Cadillac Escalade ESV GM (GMT345): Hummer H3 GM (GMT201): Buick Luxury Van
GM (UCR116): Isuzu Axiom GM (GMX320): Cadillac CTS GM (GMX367): Pontiac Grand Prix GM (GMT360): Buick Compact SUV GM (GMT201):Chevrolet Venture
GM (GMT315): Saturn VUE GM (GMT265): Cadillac SRX GM (GMT368): Chevrolet SSR GM (GMT201):Pontiac Montana
T: (328N) Pontiac Vibe GM (GMT355): Chevrolet Colorado GM (GMX635): Buick Regal/Century GM (GMT211): Chevrolet ImpalaGM (GMX380): Chevrolet Malibu GM (GMX295): Cadillac STS GM (SIGMA): Cadillac CRS
GM (GMT191): Chevrolet Traverse GM (GMT266): Saab SAV
276,463 523,585 586,942 935,269 693,530 893,501 H: (CS) Civic H: (BM) Acura MDX H: (UA) Honda Accord Sedan/Coupe H: (EX) Element H: (UM) Odyssey H: (UM2) Honda SUT
H: (CS) Acura EL H: (HP) Honda Pilot H: (GQ) Acura TL H: (BM/MD) Honda SUV
H: (CO) Acura CL H: (BM/MD) Acura MDX
H: (CS2) Civic
H: (CS2) Acura EL
420,861 44,957 514,324 156,302 243,298 579,439 T: (900T) Avalon T: (800T) Sequoia T: (330N) Corolla T: (300N2) Camry Solara T: (770N) Avalon T: (483N) Highlander
T: (300N) Camry Sedan T: (329N) Matrix T: (500N) Sienna T: (635N) Tacoma
T: (BM/MD) Highlander SUV T: (483N) Lexus RX300 T: (050X) Echo
T: (800T2) Tundra
120,252 510,915 386,772 393,839 102,763 323,898 Nissan: (MS) Sentra Nissan: (FF-L) Altima Renault: (X65) Clio (Mex) Renault: Megane (Mex) Nissan: (ZW) Infiniti Full-Size SUV Nissan: Sub B-car
Nissan: (WQW) Exterra Nissan: (J64) Renault Scenic Renault: (X65) Tsuru II (Mex0 Nissan: (FF-L) Maxima Nissan: (ZW) Full-Size Pickup Renault: Twingo (Mex)
Nissan: (FF-L) Quest Nissan: Frontier (inc. Mex) Renault: Scenic (Mex)
Nissan: (ZW) Full-Size SUV Nissan Sentra
247,379 201,481 80,720 225,518 198,460 209,150
Source: CSM Worldwide
Global Equity ResearchGlobal Equity Research-- AutomotiveAutomotiveMichael Bruynesteyn (212) [email protected]
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Assembly Plant Production Flexibility (North America)
0%
2%
4%
6%
8%
10%
12%
14%
16%
2000 2002
DCX Ford GM Honda Toyota
Flexibility is based on Dec. 2000/2001 Prudential Securities study of 24 months of production at all 88 North American assembly plants for GM, F, DCX, HMC, and TM.
Transplants clearly in the lead!
Global Equity ResearchGlobal Equity Research-- AutomotiveAutomotiveMichael Bruynesteyn (212) [email protected]
1717
Pru Auto Team Research HighlightsPru Auto Team Research Highlights
• 33% 2001 return following our recommendations vs 22% for average auto analyst (Fortune magazine)– Calc’d by Zack’s, ignoring beneficial impact of sell rating on DCX– Key rating changes on DCX, GNTX, F, SUP, LEA
• First to upgrade stocks following 9/11. – Discovered error in industry sales reporting that overstated sales
drop-off in late September.– Focused on Parts Suppliers, as they tend to recovery first
• Flexible manufacturing report highlighted importance of flex to industry, and pointed out GM strength vs F and DCX.
• Capital efficiency conference and research report
Global Equity ResearchGlobal Equity Research-- AutomotiveAutomotiveMichael Bruynesteyn (212) [email protected]
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