By on August 24, 2015

Come on Carlos, let’s hit up the Limeys for some money. Picture courtesy of motortrend.com

Markets around the world are down, down, down, down and down.

At the time of this writing, the Dow Jones Industrial Average is down roughly 650 points on Monday, which is more than 1,500 points off of where we were at the beginning of August. A lot of the run is fueled by fears that China is tapering off its growth (or they’ve been making it up for a while) and that Europe is tinkering on the brink of sinking into another recession.

There are plenty of financial sectors that are taking a beating. Automotive companies are no different. Here’s a rundown of publicly traded automakers and how much they’ve lost from their July 31 close to mid-day trading today.

Unsurprisingly, the biggest droppers are those with more exposure to China (Especially Toyota, whose production has been hampered by a blast in Tianjinand Tesla, whose second stock offering could be diluting shares in addition to the larger, global shock.

Tata Motors (TTM) — 29.66-23.01, -22.4 percent
Tesla Motors (TSLA) — 266.15-219.46, -17.5 percent
Toyota Motor Corp (TM) — 133.71-110.87, -17 percent
BMW (BMW.DE) — 91.30-77.88, -13.5 percent
Daimler (DDAIF) — 89.19-77.59, -13 percent
Nissan Motor Company (NSANY) — 19.34-16.90, -12.6 percent
Honda Motor Company (HMC) — 33.96-29.70, -12.5 percent
Ford Motor Company (F) — 15.18-13.21, -12.9 percent
General Motors (GM) — 32.08-28.22, -12 percent
Fiat Chrysler Automobiles (FCAU) — 15.80-14.02, -11.2 percent
Volkswagen AG (VLKAY) — 40.35-36.56, -9.3 percent

Earlier this month, General Motors issued a statement before the massive stock sell off to ensure investors that it would endure a devalued Chinese currency. It’s “natural hedge,” or locally sourced suppliers, would help insulate it from massive market fluctuations, but not entirely. Last month, GM announced it would invest $5 billion in a joint venture with SAIC motors in China to locally build smaller cars.

On Monday, Daimler said it would press on further in China, despite worries that the market for luxury vehicles could be drying up, according to Automotive News.

Losing this much steam in China will undoubtedly have a ripple effect in the rest of the automotive world, that much is clear. The size of the wave has yet to be determined.

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9 Comments on “Just How Bad Are the Automakers Taking a Beating in the Stock Market?...”


  • avatar
    APaGttH

    China’s growth was unsustainable.

    We live in a looney world where 7% GDP growth anywhere is “bad.” If the U.S., EU, or Canada was having 7% GDP growth inflation would be out of control.

    China’s growing middle class is changing the work structure there. It is getting more expensive to build stuff there, so job growth for what we consider low value tasks is slowing down. Some factories are finding automation is cheaper than people. We know this dance music.

    Fundamentally the global economy is not strong – but not unhealthy, if that makes sense.

    WTI has plunged through $40 and will close below $40 today – so the support is broken. RBOB also broke $1.50 and will likely close below (flirting with the line) so that support is also likely broken.

    Given market dynamics I see nothing to support WTI or RBOB. Saudi Arabia and Russia are not going to dial back production – they can’t – if anything they’ll increase if they can to try and grab more share. These price points are devastating for Russia in particular. Notice you don’t hear Putin talking about freezing out Europe this coming winter. That is off the table. Banana republics that produce oil like Venezuela, and hot spots like Iraq, Syria, Iran, and Yemen aren’t helped at these points either. Small producers in the US will go under, but the capped wells will go to someone. 3000 capped wells that can be turned on to production in 3 days to 3 weeks – so almost plug and play.

    Inventory will continue to grow.

    I think my prediction here will come to fruition, I see oil going to $28 to $30 — and RBOB dropping to $1.30 or maybe lower. I was only off by a few months.

    As far as the stock sell off, you can see the markets gave it all back already – there is a lot of fear in the market, but fundamentally things are sound. Given the market has grown steadily since 2011, historical averages, we are due for a correction.

  • avatar
    Joss

    Part of a normal (overdue) correction and don’t bet against America.

  • avatar
    APaGttH

    Can’t say WTI had a strong bounce off of the #37’s settling in at $38.27 at the end of close. There is more room for decline.

    Even more stunning is Brent down to $42.58 – the delta between Brent and WTI is very narrow relatively speaking, a further indication that there will be huge pressure on the WTI price tomorrow.

    RBOB gasoline down to $1.4488 and that is for summer blend September 15 short contract delivery. RBOB is going to drop through the floor when short contract October 15 delivery pricing kicks in in a couple of more weeks.

    This is a great read on how disconnected the national average price per gallon for gasoline is versus the price of oil right now.

    http://www.bloomberg.com/news/articles/2015-08-24/gasoline-is-both-incredibly-cheap-and-absurdly-expensive

    It simply cannot sustain.

  • avatar
    dusterdude

    I’m going into a fetal position and will cry like a baby after last few days ….

    • 0 avatar
      Kendahl

      If you are still in savings and investing mode, it’s time to start buying. Just do it slowly because prices may drop even more. Remember 2008. The market dropped by half in 4 months and took 4 years to recover. The good news is that it went on to rise by another third.

      If you are retired and living off your investments, until the market recovers, minimize spending that requires stock sales to pay for.

  • avatar
    goldtownpe

    Silver lining? Time to buy!

    Buy low, sell high.


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