Amongst all the uncertainty of our recent economic crisis one thing is certain; the American auto industry has been turned on its ear and arose a totally different animal. “The good news is we are at the bottom. That bad news is the hole is deep and it will take long to dig out,” George Magliano, Global Insight director of North America auto industry research told freep.com.
Magliano and Nariman Behravesh, chief economist for the firm, predict a slow and gradual increase in next year’s auto sales, but a mushroom cloud-like explosion by 2014, due to pent-up demand and the impending creation of jobs and recovery of the housing market. They predict that after 2012 Ford”s market share in the U.S. will surpass General Motors and come close to Toyota”s.
In the near-term however, they expect GM and Chrysler will see their market shares shrink. GM is going to have to combat the loss of four of their brands; Pontiac, Saturn, Saab, and Hummer, and Chrysler is going to be trying to deliver the kickstart needed to revive its small and midsize car segments as they try to marry their products with Fiat’s engineering and expertise.
“Given all GM has gone through, getting back to 20% market share is just not doable,” Magliano said.
Behravesh credits this upturn in the economy to government spending. “We now see lower commodity prices. Whatever you think of the bank rescues a year ago, most of them have worked,” he said. “The Federal Reserve has provided robust stimulus by keeping interest rates low. Then the government will spend more stimulus money in 2010 than it did this year.”
– By: Stephen Calogera
Source: Free Press