Autos & Shared Mobility_ Global Auto Monitor_ Oversupply

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the automotive industry, focusing on various regions including North America, China, Japan, and India. [2][3][4] Core Insights and Arguments 1. Oversupply and Demand Dynamics: - There is a noted oversupply in the automotive market, with slowing demand and rising inventory posing downside risks to future production, pricing, and product mix. [2][3] - The expectation is that autos may need to become "more expensive" before they are considered investable again. [2][3] 2. Cautious Outlook for 2025: - Analysts suggest that expectations for 2025 may need to be reset, with a more cautious tone anticipated regarding China, competition, and consumer behavior. [2][3] 3. Regional Performance: - China: Mercedes and BMW are providing additional rebates to dealers for Q1-Q3 2024, indicating a push for year-end volume. [3] - North America: The automotive sector is viewed as In-Line, with specific stocks like Tesla, Mercedes-Benz, and Honda being highlighted as preferred investments. [3] - India: The automotive market is considered Attractive, with low-single-digit growth estimates for FY25. [3] 4. Sales Forecasts: - Global light vehicle sales forecasts show a decline in several regions, with China expected to see a decrease from 22.8 million in 2018 to 21.6 million in 2025. [4] - North America is projected to have light vehicle sales of 15.6 million in 2023, with a slight increase to 16.2 million by 2025. [4] 5. Stock Rankings: - In North America, Tesla is ranked first with an estimated EPS of 1.91 for 2024, while Ford Motor is rated as Equal Weight with an EPS of 1.84. [6] - In Japan, Honda Motor is rated Overweight with an EPS of 228.04 for 2024. [7] - In India, Maruti Suzuki is rated Overweight with an EPS of 499.09 for 2024. [12] Additional Important Insights - Geopolitical Risks: Concerns over geopolitical risks, price wars, and EV adoption persist, but recent stimulus measures in China have shifted the narrative towards potential recovery. [2][3] - Electric Vehicle (EV) Sales: The global EV sales are projected to grow significantly, with a forecasted increase from 10.1 million in 2023 to 12.7 million in 2024. [4] - Market Sentiment: There is a growing anxiety among investors regarding autonomous ride-share services, particularly concerning companies like Tesla and Uber. [2] This summary encapsulates the key points discussed in the conference call, providing insights into the automotive industry's current state and future outlook across various regions.