Why U.S. Auto Sales Are Still Too Low
Natural disasters delayed the recovery in 2011, but we do not see many impediments in 2012.
We believe current U.S. light-vehicle sales are far below where they should be, and assuming no further supply constraints, we are very optimistic about the U.S. auto industry for the next several years. We believe General Motors (GM) and Ford Motor Company (F) are still incredibly cheap and auto-dimming mirror maker Gentex (GNTX) is a way to play the recovery without the worry of large legacy obligations.
We think it's critical to first understand just how bad sales were a few years ago. Exhibit 1 shows U.S. light-vehicle sales since 1951 (shaded bars denote recession years). Sales bottomed out in 2009 at only 10.43 million vehicles, quite a decline from the decade's high of 17.35 million in 2000. The last time sales were close to 10.43 million was 1982's 10.36 million.
David Whiston does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.