As Auto Sales Improve, Play It With This ETF
February 9th at 2:00pm by Tom Lydon
The auto industry and sector-related exchange traded funds (ETFs) have shown significant gains as a result of higher sales numbers. However, American consumers aren’t buying like they used to, and some don’t think sales numbers of yesteryear will return anytime soon.
U.S. auto sales increased 6% in January despite weak demand from consumers and the well-publicized Toyota Motor problems, reports Chris Isidore for CNN Money. [ETF Guide to a Rebounding Auto Industry.]
Toyota (NYSE: TM) reported that their January sales fell 16% from a year earlier. The company had to suspend sales of popular models as a result of a gas pedal problem that caused cars to accelerate uncontrollably.
Ford Motor (NASDAQ: FORD), General Motors, Nissan and Hyundai Motor all reported improved January numbers as compared to a year ago. However, Honda Motor (NYSE: HMC) and Chrysler stated that January sales dropped from the same period year-over-year.
Retail sales generally dipped, with Ford reporting a drop of 5% and GM with 10%. Still, Ford calculated that there was a 50% increase in industry-wide sales as compared to a year ago. [ETFs That Benefit from Rising Auto Sales.]
Paul Ballew, consumer economist at Nationwide, commented that automakers will continue to face depressed sales since Americans aren’t ready to spend just yet. Ballew doesn’t expect sales to recover until around 2015. But don’t forget about other markets. While sales may be tepid in the United States, countries like China and India seem to be working hard to make up the difference.
For more information on the auto industry, visit our automobiles category.
- SPDR S&P International Cons Disc Sector (NYSEArca: IPD): includes exposure to auto companies like Toyota, Honda, Daimler AG, Hyundai, Nissan and Fiat.
Max Chen contributed to this article.
