Avis made both its forecast numbers this morning, and reaffirmed last week’s full-year EPS guidance for EPS of $2.35-2.65. Analysts didn’t believe that number either, and the consensus EPS estimate rose only to $2.11.

The lack of respect for Avis’s forecast may have been due in part to an announcement from Hertz Global Holdings Inc. (NYSE: HTZ) last Thursday that it had reached an agreement with a potential buyer of the company’s Advantage rent-a-car brand, which could clear the way for Hertz’s acquisition of Dollar Thrifty Automotive Group Inc. (NYSE: DTG). That deal has been on-again, off-again for about two years, and at one time both Avis and Hertz were bidding on Dollar Thrifty.

Like Hertz, Avis revised its fleet costs downward by 3%-8%, based on the lower depreciation rates for its fleet. Used car values have risen and that has helped both companies. Dollar Thrifty reports quarterly results next week and is expected to post EPS of $1.30, up from $1.28 just a week ago, on revenue of $355.53 million.

Shares of Avis closed down -1.3% on Friday at $15.90 in a 52-week range of $8.45-$19.24. There has been no change in the share price in the pre-market so far this morning.

Paul Ausick

According to the announcement the company plans to use the proceeds “to enhance the integration of its Fenco Automotive Products acquisition and for general corporate purposes to support the company’s growth.”

Now, $15 million is not a huge amount, but at the end of March the company reported less than $1.5 million in cash, cash equivalents, and short-term investments versus long-term debt of $62.56 million. Borrowing any more was probably not an option and the unnamed buyer drove a hard bargain. Motorcar Parts had better show some positive results from this transaction or the company could be toast.

Paul Ausick

Zoltek’s CEO said:

We have long regarded the automotive industry as the largest potential user of low-cost, high-performance carbon fibers, and it is a vital part of our strategy as the largest producer of these fiber[s] to work closely with leading suppliers to the automotive industry of parts and sub-systems.

Magna, with a market cap of more than $11 billion, certainly qualifies as a leading supplier. The two companies did not provide specific details of their agreement.

Zoltek’s shares are up nearly 17% at $11.90 in a 52-week range of $5.60-$15.01.

Read: The Least Dependable Cars in America

24/7 Wall St. looked at the recently released JD Power 2012 U.S. Vehicle Dependability Study. We reviewed the auto brands that received the lowest scores. The brands with the most dependability issues were examined to determine why they received such poor marks.

The JD Power survey is based on the responses of more than 31,000 original owners of 2009 model-year vehicles after three years of ownership. Dependability is determined “by the level of problems experienced per 100 vehicles (PP100), with a lower score reflecting higher quality.” The industry’s average for the current study was 132 PP100. The worst brands had more than 160 problems.

For one, many are niche brands. Seven of the nine brands have a U.S. market share of 3% or less. Mainstream brands such as Ford (NYSE: F), Chevy and Toyota (NYSE: TM), which have closer to 15% of the market, do not make the list. Is brand reliability related to market share? There is no evidence that is true.

Some small market share brands like Lexus get high quality marks. However, the small market share brands on this list do not have anywhere near the production quality of Mercedes or Lexus. They are lower end brands with small market share.

The effects of the Chrysler Chapter 11 filing in April 2009 are obvious when looking at the list. The survey measures the dependability of cars manufactured in 2009 after three years of ownership. When the 2009 Chrysler, Jeep and Dodge models were manufactured, Chrysler was in great turmoil, including layoffs, management changes and plant closures — all of which can affect manufacturing quality. It should come as no surprise then that three of the brands on this list are part of that parent company.

The least dependable cars include nine brands that JD Powers’ 2012 Vehicle Dependability Survey lists as having the highest incidence of problems. The dependability number provided for each brand represents the number of reported defects per 100 vehicles — the higher the score, the lower the quality. Initial quality scores by brand and brand dependability scores for these automakers’ most popular vehicles also were reviewed.

Also Read: The Highest-Paid Athletes of All Time

Brand satisfaction scores from the American Consumer Satisfaction Index also were included. Most of the brands on our list ranked close to the bottom in ACSI score relative to the other automakers. We also list what we consider to be the brand’s flagship vehicle — the most recognized and usually one of the highest-selling models of the brand.

These are the least dependable cars in America.

The primary reason for the drop in US pump prices is the drop in the price of Brent crude. Because oil is fungible, a barrel of Brent crude imported by tanker to the US is now setting the price that refiners are able to charge for a gallon of gasoline. This has been the situation since the beginning of the year.

A refiner in the midwestern US does not pay the Brent price for a barrel of crude, but a lower WTI or other price discounted even further from Brent pricing. Like oil, gasoline is also fungible, and the value of the gasoline refined from those cheaper barrels is identical with the value of a gallon of gasoline refined from Brent. What economists call the “law of one price” applies here: identical goods have only one price. The price of gasoline, then, was based on the price of Brent crude and refiners charged for gasoline as if the crude input was Brent, no matter what the crude’s actual source.

The wide spread between WTI and Brent prices meant that refiners able to use WTI realized a much larger profit on every gallon of gasoline they sold. Now that the price of Brent is dropping, the spread is closing. The spread is about $11/barrel today, but it has been as low as $8/barrel, after reaching a peak of nearly $28/barrel in early September. The rising price of WTI crude is having a negative impact on refiners’ margins, but no impact at all on pump prices. Pump prices keep falling because Brent crude prices are falling.

Like all good things, it won’t last forever. As WTI and Brent prices converge, the drop in pump prices will stop. And even if WTI prices should surpass Brent pricing again, the oil market will figure out a way to arbitrage the new spread to maximize profits. Enjoy the low prices while they last. Until then, maybe there is more cash for gifts this holiday season.

Paul Ausick

Competition plays a critical role in car rental agencies as well. We’ve gathered some data on Hertz Global Holdings Inc. (NYSE: HTZ) and Budget Group Inc. (NYSE: CAR), who were battling over Dollar Thrifty until earlier this month. We’ve also included Zipcar Inc. (NASDAQ: ZIP) in our review because there is evidence that its short-term rental model is about to get competition from both the big rental companies and the new car makers themselves.

Finally, we’ve looked at parts suppliers O’Reilly Automotive, Inc. (NASDAQ: ORLY), AutoZone, Inc. (NYSE: AZO), and Pep Boys – Manny, Joe, and Jack (NYSE: PBY). As car owners hold onto their cars longer, parts suppliers stand to profit.

All data from Yahoo! Finance and current stock prices were gather just before noon today.

General Motors Co. (NYSE: GM) has a median target price of $42.00 from 17 brokers. Shortly before noon today, shares are trading today at $22.78, for an implied gain of $19.22, or 84%. GM’s forward P/E is 5.24 and the company does not pay a dividend. The stock’s 52-week trading range is $19.05-$39.48, and at today’s price that’s about 20% above its 52-week low and 42% below the 52-week high.

Ford Motor Co. (NYSE: F) has a median target price of $16.00 from 15 brokers. Shares are trading today at $11.61, for an implied gain of $4.39, or 38%. Ford’s forward P/E is 6.59 and the company does not pay a dividend. The stock’s 52-week trading range is $9.05-$18.97, and at today’s price that’s about 28% above its 52-week low and 39% below the 52-week high.

Hertz Global Holdings Inc. (NYSE: HTZ) has a median target price of $21.00 from 5 brokers. Shares are trading today at $10.37, for an implied gain of $10.63 or 133%. Hertz’s forward P/E is 6.43 and the company does not pay a dividend. The stock’s 52-week trading range is $7.80-$17.64, and at today’s price that’s about 33% above its 52-week low and 41% below the 52-week high.

Avis Budget Group Inc. (NYSE: CAR) has a median target price of $27 from 5 brokers. Shares are trading today at $11.61, for an implied gain of $15.39, or 133%. Avis’s forward P/E is 8.95 and the company does not pay a dividend. The stock’s 52-week trading range is $8.45-$19.49, and at today’s price that’s about 37% above its 52-week low and 40% below the 52-week high.

Zipcar, Inc. (NASDAQ: ZIP) has a median target price of $31.25 from 4 brokers. Shares are trading today at $17.38, for an implied gain of $13.87, or 80%. Hertz’s forward P/E is an astronomical 273 as the company has yet to show a profit since its IPO in April. The company does not pay a dividend. The stock’s 52-week trading range is $16.50-$31.50, and at today’s price that’s about 5% above its 52-week low and 45% below the 52-week high.

AutoNation, Inc. (NYSE: AN) has a median target price of $32 from 8 brokers. Shares are trading today at $37.06, about 5% above its consensus target price. AutoNation’s forward P/E is 17.55 and the company does not pay a dividend. The stock’s 52-week trading range is $22.28-$41.55, and at today’s price that’s about 66% above its 52-week low and 10% below the 52-week high.

CarMax Inc. (NYSE: KMX) has a median target price of $33 from 13 brokers. Shares are trading today at $27.76, for an implied gain of $5.24, or 19%. CarMax’s forward P/E is 14.06 and the company does not pay a dividend. The stock’s 52-week trading range is $22.77-$37.02, and at today’s price that’s about 22% above its 52-week low and 25% below the 52-week high.

America’s Car-Mart, Inc. (NASDAQ: CRMT) has a median target price of $37 from 5 brokers. Shares are trading today at $29.89, for an implied gain of $7.11, or 24%. Car-Mart’s forward P/E is 8.86 and the company does not pay a dividend. The stock’s 52-week trading range is $22.77-$37.50, and at today’s price that’s about 31% above its 52-week low and 20% below the 52-week high.

O’Reilly Automotive, Inc. (NASDAQ: ORLY) has a median target price of $68 from 19 brokers. Shares are trading today at $70.16, about 2% above its consensus target price. O’Reilly’s forward P/E is 17.12 and the company does not pay a dividend. The stock’s 52-week trading range is $52.97-$72.00, and at today’s price that’s about 32% above its 52-week low and 3% below the 52-week high.

AutoZone, Inc. (NYSE: AZO) has a median target price of $350 from 17 brokers. Shares are trading today at $326.17, for an implied gain of $23.83, or 7.3%. AutoZone’s forward P/E is 12.59 and the company does not pay a dividend. The stock’s 52-week trading range is $229.84-$337.23, and at today’s price that’s about 42% above its 52-week low and 3% below the 52-week high.

Pep Boys – Manny, Joe, and Jack (NYSE: PBY) has a median target price of $16 from 5 brokers. Shares are trading today at $10.95, for an implied gain of $5.05, or 46%. The Pep Boys’s forward P/E is 9.43 and the company pays a dividend yield of 1.1%. The stock’s 52-week trading range is $7.86-$15.96, and at today’s price that’s about 39% above its 52-week low and 31% below the 52-week high.

As you can see, there are some of the auto-related stocks that are close to or are now fully valued.  Still, there remains massive upside if the consensus analyst targets can be met.  Some upside targets are still so high that you have to wonder if they have been updated to reflect the new reality or if they are even really attainable.

Paul Ausick

The Office for the Special Inspector General for the Troubled Asset Relief Program said in a recent report that the bailout of the car industry put a lot of people out of work. That does not just include the people the auto firms laid off from their own payrolls. GM and Chrysler, both of which got government funding to come out of Chapter 11, were criticized early in the process for not closing enough dealerships to help the stanch the flow of red ink. GM decided to close 1,454 dealers and Chrysler 789 in response to the criticism from government officials. The Inspector General pointed out the car companies did not consider whether there was any substantial savings to be had from closing dealers and did not take into account how many people the move would put out of work.

The downsizing of the car industry  in 2008 and 2009 cost 400,000 jobs at the car companies according to the report. The dealer closings increased that figure by tens of thousands as 24/7 Wall St. wrote last June.

It is easy to say that the restructuring of GM and Chrysler happened so fast the dealer closings were collateral damage.  But since the federal government may never get back the entire amount it put into the two car companies, the closures made the process costlier to the federal government and local economies. Nearly all the people who lost jobs at dealerships will receive unemployment and tax revenue for the cities and town were the dealers were located will shrink.

One of the problems of the car industry restructuring is that it was not run by car people. Washington assumed that the industry had caused its problems and that no one within the industry could solve them. That does not mean that people from outside the industry, selected by the government, could do any better.

The prevailing opinion about why the auto sector ran out of money and therefore time to get itself turned around is that GM and Chrysler were poorly run. That may be true, but only to some extent. The greatest recession in the industry,  which dropped US vehicles sales from over 16 million units in 2004 to 10 million units in 2009, played a more substantial role that any other factor. People dispatched by the federal government to “fix” the industry may not have taken that into account enough.

What car industry executives might have told the government, if they were not afraid for their own jobs, is that the size of their dealer networks have very little to do with their overall costs. Most of a dealer’s expenses are borne by the dealer and not the manufacturer that supplies it cars. Dealership closings had only a marginal effect on the costs at GM and Ford.

Collateral damage is collateral damage until it undermines something core to the process of saving an industry. Unnecessarily putting tens of thousand of people out of work falls into a category of core damage but no one seemed to understand or care about that.

Douglas A. McIntyre

It is a different matter today in China. The market is now the world’s largest for vehicle sales. Seventeen million cars and trucks will probably be sold in the People’s Republic this year, more sales than the US ever generated. That makes the labor strikes, which have begun once again at Honda (NYSE: HMC) and Toyota (NYSE: TM), all the more costly.The two Japanese car companies said they had stopped production at their plants in southern China. Local firm Guangzhou Auto Group has joint ventures with both manufacturers. That has not given management any leverage. Workers know that Toyota and Honda will lose market share to the sales leaders VW and GM if they cannot keep their plants open. The central government has largely stayed out of the matter except to mention that the rights of workers need to be honored.

Workers have not attempted to shutter VW or GM facilities or those of any of the other large car companies headquartered in Asia or Europe. The labor movement is too clever for that. If vehicle production across China is slowed, the country’s GDP will be damaged, if only slightly. The rapid growth of the burgeoning car market would be undermined.

Auto workers do not need to strike VW or GM now. They have already sent a message to those companies. Unions at vehicle manufacturers in China expect raises of 50% to 100% for their members if the Toyota and Honda labor problems are any guide. The firms will not have much say in the matter. Market share in China is too precious and it will only take a month or two of slow or no production to give some manufacturers an important edge.  That makes the unions into king makers.

Douglas A. McIntyre

Auto loan delinquencies are measure by those more than 60 days past due.“Information for this analysis is culled quarterly from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10 percent of credit-active U.S. consumers and providing a real-life perspective on how they are managing their credit health.”

A lack of access to credit has been blamed for the fact that domestic car sales have not rebounded more quickly. Banks have been reluctant to offer loans to buyers unless they have high credit scores. The US car companies did not have the balance sheets to re-enter the lending market while Japanese and European firms have been able to use their own financial units to draw customers.

The news is also another indication that the consumer leverage trouble that helped cause the 2008 economic collapse is ending. There is already evidence from credit rating agencies and card companies like Visa (NYSE: V), MasterCard (NYSE MA), and American Express (NYSE: AXP) that charge-offs of bad consumer loans are falling. The trend has also helped the return of shoppers to retail outlets.

Car loans have liens on the vehicles which they cover. Since auto values drop almost 30% in the first year after sales, the cars are not ideal collateral. That makes the improvement in delinquencies even more important.

Douglas A. McIntyre

Homebuilder stocks are up 19.3% in the past month. The best performing stocks in the index are Hovnanian Enterprises Inc., (NYSE: HOV) up 66.9%, Palm Harbor Homes Inc., (NASDAQ: PHHM) up 49.5%, and Standard Pacific Corp., (NYSE: SPF) up 45.5%.

Vehicle rental stocks are up 33.8% in the past month. The best performing stocks in the index are Dollar Thrifty Automotive Group Inc., (NYSE: DTG) up 58.8%, Hertz Global Holdings, Inc., (NYSE: HTZ) up 29.5%, and Avis Budget Group, Inc., (NYSE: CAR) up 19.5%.

Recreational vehicles are up 22.8% in the past month. The best performing stocks in the index are Arctic Cat Inc., (NASDAQ: ACAT), Brunswick Corp., (NYSE: BC) up 31.7%, and Harley-Davidson, Inc., (NYSE: HOG) up 17.6%.

24/7 Wall St.