These auto stocks are on the road to recovery

As the U.S. auto market works its way through a slump, the rest of the world is picking up the slack.

Vikram Barhat 4 October, 2017 | 5:00PM

The U.S. automotive sector is going through a rough patch. Moody's predicts that auto sales will fall 3.6% this year. Worse, the weakness in the sector is forecasted to drag on for 18 months. In a stark contrast, though, car sales in Canada have been clocking record numbers almost every month this year.

For auto manufacturers, and investors, this divergence is a good sign. It means that the rest of the global auto market, especially in developing economies, is picking up the slack as the U.S. market works its way through the slump. In fact, a recent Morningstar report forecasts strong global growth in the auto industry. Similarly, a Scotiabank report says global car sales are indeed poised for an eighth consecutive annual record, powered by acceleration in emerging economies as well as resurgence in Latin America bouncing after a three-year decline.

Record global sales, says the Scotiabank report, reveal a clear disconnect between the reality and widespread fears and pessimism in the mainstream media.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Fiat Chrysler Automobiles NV12.23 USD-1.05
Ford Motor Co6.77 USD-2.84
General Motors Co29.70 USD-3.29
Volkswagen AG ADR15.69 USD-1.89

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a freelance writer.