US Auto Manufacturers and Auto Parts & Equipment: Positive 2Q Outlook

Research evidence excerpt

US Auto Manufacturers and Auto Parts & Equipment: Positive 2Q Outlook

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12 Jul 2026 22:26:28 ET │ 13 pages

US Auto Manufacturers and Auto

Parts & Equipment

Positive 2Q Outlook

Michael Ward AC

CITI'S TAKE +1-212-816-5754

michael.p.ward@citi.com

Second-quarter earnings season kicks off for the auto group the week of

July 20. The stocks mostly underperformed in 2Q, following volatility of oil

prices and the conflict in Iran. Forward guidance for the industry coming out

of first-quarter earnings season was cautious, but US sales held up better

than expected, pricing/mix has been positive, NA production exceeded plan

in each month, the 2Q total will likely end 2% above initial estimates, and

dealer inventory is favorable. Europe and China have been the weak spots;

the YOY declines in China have been subsiding and overall production in 2Q

in both regions has been in line with estimates heading into the period.

Bottom line, low expectations and better-than-expected performance in

North America provide a good setup for the group going into 2Q earnings.

Best Positioned — Production of the F-series pickup trucks were better than

expected; production was down 2% YOY but increased 20% from 1Q. Improving

demand, inventory replenishment and easy comps should provide double-digit

gains in the second half. We believe Ford benefits the most, and on the supplier side,

Adient and Cooper Standard have the most relative exposure to the F-series and 2Q

performance as well as second-half guidance should benefit.

Production — The Top 10 programs at the Detroit 3 account for 70% of combined

production and generate the highest margins for the vehicle manufacturers as well

as the suppliers. Production of the Top 10 was up 0.3% YOY and up 6% versus 1Q.