Last week, the European Automobile Manufacturers Association released data on new car registrations for November 2024. Registrations in the European Union (“EU”) car market totaled 869,816 units last month, witnessing a year-over-year decline of 1.1%. Among the four major EU markets, registrations fell in all but Spain, which recorded growth of 6.4%. Sales in France and Italy plunged 12.7% and 10.8%, respectively, while Germany vehicle sales inched down 0.5%

In the first 11 months of 2024, EU market vehicle registrations reached 9.7 million units, up 0.4% year over year. During the said timeframe, registrations in Spain recorded growth of 5.1% on a year-over-year basis. Registrations in France, Italy and Germany decreased 3.7%, 0.2% and 0.4%, respectively, in the first 11 months of the year.

On the news front, U.S. legacy automaker Ford F and its Korean battery partner, SK On Ltd., secured a $9.63 billion loan from the U.S. Energy Department. Specialty vehicle manufacturer Shyft Group SHYF and Aebi Schmidt Group have announced a definitive all-stock merger to create a global leader in specialty vehicles. Used car retailer CarMax KMX and recreational vehicle maker Winnebago Industries WGO came out with their quarterly results last week. Finally, auto equipment manufacturer Gentex Corporation GNTX grabbed headlines with its plans to acquire VOXX International.

Last Week’s Top News

Ford and SK On have secured a $9.63 billion loan from the U.S. Energy Department to construct three advanced EV battery plants in Tennessee and Kentucky. This loan will support the development of 120 gigawatt hours of battery capacity and create 7,500 jobs across the BlueOval SK LLC facilities.The Energy Department hailed the loan as a significant step toward reshoring manufacturing, reducing reliance on Chinese supply chains and achieving the Biden administration's goal of making half of all U.S. vehicles zero-emission by 2030. 

BlueOval SK has already invested more than $11 billion in the construction of its three facilities, each spanning four million square feet, as well as in workforce development and equipment installation. The first Kentucky plant is slated to begin production in early 2025, followed by the Tennessee plant later that year. In a separate development, Ford extended their joint development agreement with Solid Power on solid-state battery technology until Dec. 31, 2025.

Gentex announced plans to acquire VOXX in an all-cash deal valued at $7.50 per share, subject to shareholder and regulatory approvals. The acquisition, expected to be closed in the first quarter of 2025, is set to bolster Gentex's portfolio, adding VOXX’s automotive, consumer electronics, and audio businesses. These include EyeLock iris biometric technology, offering advanced authentication capabilities, and Premium Audio brands like Klipsch and Onkyo. Gentex aims to leverage its expertise in high-volume manufacturing to expand these offerings in the automotive and connected home markets.

Gentex projects an annual revenue boost of $350–$400 million from the acquisition and plans to enhance profitability through supply chain and ERP integration, and operational efficiencies within 18–24 months. Additionally, tax benefits of $15–$20 million are anticipated over the next 5-6 years. This strategic acquisition aligns with Gentex's long-term growth goals, enhancing market reach, product innovation and shareholder value.

CarMax reported third-quarter fiscal 2025 (ended Nov. 30, 2024) adjusted earnings per share of 81 cents, which beat the Zacks Consensus Estimate of 62 cents. The bottom line also rose from 52 cents per share recorded in the year-ago period. The auto retailer registered revenues of $6.22 billion in the quarter under review, which surpassed the Zacks Consensus Estimate of $5.99 billion. The top line also rose 1.2% year over year.

KMX has a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CarMax’s used-vehicle net sales totaled $4.89 billion for the reported quarter. The units sold in this segment rose 5.4% year over year to 184,243 vehicles. Comparable store used-vehicle units increased 4.3% and revenues rose 0.5% from the prior-year level. Used-vehicle gross profit per unit came in at $2,306. The firm had cash/cash equivalents and long-term debt of $271.9 million and $1.59 billion, respectively, as of Nov. 30, 2024. During the fiscal third quarter, CarMax repurchased shares worth $114.8 million. As of Nov. 30, 2024, it had $2.04 billion remaining under the share repurchase authorization.

Winnebago incurred an adjusted loss of 3 cents per share for first-quarter fiscal 2025 (ended Nov. 30, 2024) against the Zacks Consensus Estimate of earnings of 16 cents per share. WGO had reported EPS of $1.06 in the year-ago period. Revenues of $625.6 million fell short of the Zacks Consensus Estimate of $675 million. The top line also declined 18% year over year. Winnebago had cash and cash equivalents of $262.5 million as of Nov. 30, 2024. Long-term debt (excluding current maturities) totaled $637.7 million.

During the quarter under review, WGO bought back shares worth $30 million. The company approved a dividend of 34 cents per share on Jan. 29, 2025, to shareholders of record as of Jan. 15, 2025. While WGO reaffirmed its fiscal 2025 consolidated revenues in the band of $2.9-$3.2 billion, it tightened its profit outlook. Adjusted EPS is now estimated to be between $3.10 and $4.40 compared with the prior guided range of $3-$4.50.

Shyft and Aebi Schmidt will unite to create a global leader in specialty vehicles, combining Shyft’s expertise in commercial vehicle manufacturing and assembly with Aebi Schmidt’s portfolio in snow and ice management, street sweeping, and agricultural solutions. Under the terms, Shyft shareholders will receive 1.04 shares of the combined company’s stock for each Shyft share, giving its shareholders 48% ownership of the new entity, which will trade on Nasdaq. The merger, unanimously approved by both boards, is structured to be tax-free for Shyft shareholders and is expected to close in early 2025.

The combined company aims to generate pro-forma 2024 revenues of $1.95 billion and adjusted EBITDA of over $200 million, supported by $25–30 million in expected cost and revenue synergies by year two. The partnership enhances geographic reach, with 75% of the revenues derived from North America and strong European operations. The leadership will be helmed by Aebi Schmidt CEO Barend Fruithof, while Shyft CEO John Dunn will assist with integration. This strategic merger is set to unlock significant growth opportunities, deliver shareholder value through integration, and drive profitability in high-margin markets.

Price Performance

The following table shows the price movement of some of the major auto players over the last week and six months.

Image Source: Zacks Investment Research

What’s Next in the Auto Space?

Next week, various auto biggies will release their U.S. vehicle delivery numbers for the fourth quarter of 2024. Stay tuned for other usual news updates as well.

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Ford Motor Company (F) : Free Stock Analysis Report

CarMax, Inc. (KMX) : Free Stock Analysis Report

Gentex Corporation (GNTX) : Free Stock Analysis Report

Winnebago Industries, Inc. (WGO) : Free Stock Analysis Report

The Shyft Group, Inc. (SHYF) : Free Stock Analysis Report

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