LATEST FROM OUR BLOGS

» More

- Taking a Page from Obama's Asia Agenda in Investing

MORE HEADLINES

» Markets | Economy | Companies

- Washington Not Trying to Contain China: Obama

BEHIND THE WHEEL VIDEO

» More

Hot Sector Picks in Asia

15 Nov 2009

Continue to buy commodity, tech and auto stocks, suggests Clay Carter, head of international equities at Perennial Investment Partners. He explains his investment strategy to CNBC's Chloe Cho.

Turning A New Leaf 13 Nov 2009
Nissan is unveiling its electric car, with Carlos Ghosn, Nissan CEO and CNBC's Phil LeBeau.

What is Driving the Indian Auto Market?

12 Nov 2009

The Indian auto market is very hot, not simply due to stimulus provided by the government. Anand Mahindra, vice-chairman & MD of Mahindra & Mahindra, tells CNBC's Chloe Cho what else is driving the Indian auto market.

GM Chairman Urges Easing of Pay Caps 11 Nov 2009
GM chairman Ed Whitcare says it is hard to attract talent with pay restrictions, reports CNBC's Phil Lebeau.
GM's Road Ahead 11 Nov 2009
General Motors Chairman Ed Whitacre is calling on the Obama administration to loosen pay caps. CNBC's Phil LeBeau has more on this and GM's road ahead.

RSS FEED

» Help

Subscribe to this RSS feed
Stay up to date with Behind The Wheel.

CNBC ON DIGG

Behind The Wheel

Text Size

Jan.06

10:07 AM ET

Tuesday, 6 Jan 2009

Auto Industry Has Hit The Bottom? I Say Yes

Posted By:Phil LeBeau

Topics:Economy (U.S.) | Technology | Automobile Industry

Sectors:Automobiles and Parts

Companies:General Motors Corp | Ford Motor Company

Toyota Dealership
NNECAPA
Toyota Dealership
As I was watching the dismal auto sales numbers come in on Monday, I was waiting for somebody to drop me an e-mail and sarcastically remind me that it was just a few months ago when I said, "Things can't get much worse in the auto industry." That e-mail never arrived, but the bad news from the automakers was non stop.

By the time Chrysler reported a 53 %decline in December sales, I thought it was the fitting way to cap a day of horrible news. The numbers last month don't lie:

• Chrysler Down 53%

• Toyota Down 37%

• Honda Down 35%

• Ford Down 32%

• GM Down 31%

The fourth quarter produced the weakest auto sales since 1981, and in general, few expect a rebound anytime soon. In fact, Ford said on its conference call that the first quarter would be bad. You get the point.

But how much worse will it get? Realistically, where is the bottom? Much like the stock market, you can't predict the bottom of a sales market. There are, however, some encouraging signs.

GM saw a noticeable increase in showroom traffic the last week of December. GMAC and other lenders are starting to loosen up credit restrictions on potential buyers. And the offers/incentives have rarely been this sweet.

So, at the risk of opening myself for more ridicule, I will once again predict that we have seen the bottom for the auto industry. We won't snap back in sales. We may even see a shock or two over the next six months. Still, I believe that this December is the point we will look back on as the time when the auto industry hit its low point.

_____________________________________
Click on Ticker to Track Corporate News:

- Ford Motor [F Loading... () ]