In the following video, Motley Fool analysts Andrew Tonner and Brendan Byrnes discuss the problems automakers face overseas today.
European sales have hit a 19-year low, with November sales alone down 10%. German automakers continue to do well on a relative basis, but American manufacturers are struggling, as General Motors was down 13% in November and Ford fell about 10%, which is the industry average. Ford will lose at least $1.5 billion in Europe alone this year, and it's projected that Ford will continue to lose money next year, matching this year's estimated $1.5 billion in Europe alone. This might be a reason Toyota and Honda are trading at higher multiples than Ford or GM.
Still, American automakers are attractive for investors, and the worries about Europe are priced in. For investors with a long-term horizon, these stocks might still be attractive, but keep an eye on Europe.
Andrew Tonner and The Motley Fool own shares of Ford. Brendan Byrnes owns shares of Ford and General Motors. Motley Fool newsletter services recommend Ford and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.