A multidecade dynasty just ended with a whimper...
For more than 40 years, the top-selling vehicle in America was the iconic Ford F-150. But now, the king has fallen.
The top-selling car in America is no longer a Ford. In fact, it isn't even American made. It's the RAV4... from Japanese competitor Toyota Motor (TM).
My colleague Vic Lederman from our corporate affiliate Chaikin Analytics recently wrote about this shift in the Chaikin PowerFeed daily e-letter. Here's what he said...
Last year, the F-150 sold roughly 460,915 units. But the RAV4 clocked in an incredible 475,193 units. That's nearly 14,300 more RAV4s sold versus F-150s.
Of course, this is unwelcome news for Ford Motor (F). But the $37 billion automaker is facing even stiffer headwinds than its fading F-150 line.
In fact, the entire U.S. automotive industry is in trouble today. That's because if the new Trump administration isn't careful, new tariffs could "blow a hole in the U.S. industry that we have never seen"...
That's a quote from Jim Farley, Ford's CEO, who recently sounded the alarm about tariffs.
He describes them as no less than an existential threat to the American automotive industry. And he may be right.
According to S&P Global Mobility, about 3.6 million cars – roughly a fifth of all U.S. car sales – were imported from Mexico and Canada last year.
Now, that supply chain is in danger. President Donald Trump has announced a flat 25% tariff on steel and aluminum imports. As I write, the proposed tariffs could take effect as early as March 12. And they could stack with tariffs Trump has been trying to install across the Mexican and Canadian borders.
A lot of folks are hoping tariffs will revitalize industries in the U.S. But at least when it comes to cars, American automakers could suffer most.
Here's Farley again about how exactly the new tariff would pinch U.S. carmakers...
frankly gives free rein to South Korean and Japanese and European companies that are bringing 1.5 million to 2 million vehicles into the U.S. that wouldn't be subject to those Mexican and Canadian tariffs... It would be one of the biggest windfalls for those companies ever.
In short, the automotive supply chain in America isn't ready for Trump's tariffs.
Products like the Ford F-150 are losing popularity with consumers already. And based on data from investment bank Benchmark Co., the tariffs could tack nearly $6,000 onto the price of the average new car.
That's bad news for domestic car companies like Ford.
Trump's emerging trade policy might hope to put "America first"... But in practice, it could deal a big blow to American companies. Unless things change, border tariffs will hand foreign automakers their biggest windfall in history.
So be sure to exercise caution if you're long on U.S. automakers today.
Good investing,
Sean Michael Cummings
Further Reading
Trump's plans to ramp up the American energy industry could create a ripple effect across the entire economy. But the market still isn't paying attention to the sector – which means investors have a rare opportunity to get in while valuations are near historic lows... Read more here.
Dealmaking has been in a slump since 2022. But with interest rates falling and a new political regime of deregulation in place, the two main problems for mergers and acquisitions are reversing. And that means we're setting up for a major boom in 2025... Learn more here.
HIGHS AND LOWS
NEW HIGHS OF NOTE LAST WEEK
Citigroup (C)... financial giant
S&P Global (SPGI)... financial analytics
Moody's (MCO)... credit-ratings firm
Quest Diagnostics (DGX)... medical data
Gilead Sciences (GILD)... biotechnology
AT&T (T)... telecom
T-Mobile (TMUS)... telecom
Netflix (NFLX)... video streaming
Meta Platforms (META)... social media giant
Alibaba (BABA)... Chinese e-commerce
Walmart (WMT)... discount retail king
Carvana (CVNA)... online used cars
Tempur Sealy (TPX)... mattresses
Starbucks (SBUX)... coffee "World Dominator"
Philip Morris International (PM)... cigarettes and alternatives
Sprouts Farmers Market (SFM)... grocery stores
DoorDash (DASH)... food-delivery app
Yum Brands (YUM)... fast-food brands
Alamos Gold (AGI)... gold
Palantir Technologies (PLTR)... defense-software solutions
NEW LOWS OF NOTE LAST WEEK
Moderna (MRNA)... biotechnology
Hologic (HOLX)... medical devices
General Dynamics (GD)... defense contractor
