US Automakers Expected to Post Gains


Sunday, February 27th, 2011
News

According to the Dayton Business Journal, analysts are projecting a 37 percent increase in revenue. These reports indicate that the auto manufacturing sector is on a path to recovery. The report provided by the Dayton Business Journal indicates that the car sales for February are expected to be around 937,000, which would equate to roughly a 20 percent increase since last year at the same time and a 14 percent increase since last month. Also, a report from Edmunds.com indicates that the Seasonally Adjusted Annualized Rate (SAAR) should be up 100,000 from last month to 12.6 million.

Analysts have stated that while February started slow initially, it gained momentum after President’s day weekend. It is anticipated that that General Motors should be up roughly 37 percent, while Toyota is projected to gain 28.8 percent, followed by Nissan Motor Co. at 26.6 percent, Honda Motor Co. at 16.3, and Ford Motor Co. at 7 percent.

General Motors continues to be the strength of the auto manufacturing industry, however it is still owned largely by taxpayer dollars. Toyota has fallen to its lowest market share. While the rationale afforded for the company peaking at this time in the year has been slim, many blame it on logistic and coordination problems. The company seems to be unable to get its newest products onto the market fast enough.

According to the New York Times, the auto industry’s rebound may not be an indication of the overall recovery of the US economy, and rather indicates that credit lending limitations have become less restricted. The article indicates that borrowers are now more than ever finding it easier to obtain loans that even a few months ago. In excess of 859,000 cars were sold in 2010 to buyers will subprime credit ratings. This is a 60 percent increase from a year before, according to the New York Times. The connection between looser credit and the gains in the auto manufacturing sector may well be related given this information.

Sources:

http://www.bizjournals.com/dayton/news/2011/02/27/report-big-increase-february-auto-sales.html

http://www.nytimes.com/2011/02/28/business/28autos.html?src=busln

http://www.marketwatch.com/story/gm-seen-pacing-strong-february-car-sales-2011-02-25

 



Article by Andrew Timm

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: auto industry , gains , gm , reports , sales

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