Shares of Ford Motor Co. F, -5.47% dropped 3.5% in premarket trading Friday, putting them on track for their first loss in 11 sessions, to snap a record-long win streak. The automaker’s stock had soared 22.6% during the 10-day streak, which started after the stock closed at a 22-month low of $10.95 on Nov. 28. Friday’s pullback comes after electric vehicle maker Tesla Inc. TSLA, -2.38% said late Thursday it was cutting prices on several models, with some models seeing discounts of nearly 20%. Tesla’s stock slumped 5.2% ahead of Friday’s open. Among other automakers, shares of General Motors Co. GM, -5.00% slid 2.6% toward their first decline in nine sessions, Lucid Group Inc. LCID, -2.59% fell 1.6% and Rivian Automotive Inc. RIVN, -7.96% shed 2.8%, while Nikola Corp. NKLA, +1.20% gained 1.6%. Meanwhile, futures ES00, +0.10% for the S&P 500 SPX, +0.10% eased 0.1%.
Goldman Sachs analyst Mark Delaney wrote Tuesday evening “the weak macro backdrop [will] make for a challenging and choppy fundamental [car] environment in 2023.”
Delaney has a lot of questions headed into the new year, including whether auto makers can maintain profit margins as production recovers. Auto sales in the U.S. fell about 8% year over year in 2022. New car sales amounted to just under 14 million, according to auto data provider Cox Automotive. That’s the lowest level since 2011, when the industry was still managing through the fallout from the 2008-09 Financial Crisis.
The falling production did have a side benefit for the auto industry: record pricing due to reduced supply. However, with production finally recovering and the economy slowing, car pricing should fall.