Three factors are providing warning signs within the automobile industry, the head of Morgan Stanley's Global Auto Research Team said Friday.
"We think we're seeing some early signs of a bubble due to what we call the three Cs: credit, currency and capacity," Adam Jonas told CNBC.
"On the credit side, we're seeing some yellow flags. Banks are getting a little more aggressive in terms of credit availability. Subprime is back to where it was precrisis in terms of percentage of the new market. Credit losses are rising, albeit from a very low level. Leasing is going gangbusters, approaching 30 percent of the market."
On CNBC's "Fast Money," Jonas said that "yellow flags" means that the run in auto stocks isn't necessarily over.
(Read more: S&P 500 heading to 1,820: Laszlo Birinyi)
"It can run further," he said. "That's why we say we're in the early stages of a bubble, but we're seeing a warning."