James W. Paulsen, chief investment strategist at Wells Capital Management, sees U.S. auto sales bouncing “back to normal” by year’s end. “Normal” being “a rate of 15 million to 16 million vehicles.” Bloomberg painted a nice Chart of the Day, which seems to support that gutsy theory.
Paulsen and Bloomberg charted the recoveries after the 1981-1982 and 1990- 1991 recessions, and overlaid them with the current sales rebound. If that rebound behaves like the previous rebounds, the chart says anywhere between 14 and 15 million by year’s end, but let’s not quibble.
Paulsen and Bloomberg are pretty much alone with that forecast. Despite a good December, J.D. Power kept its 2011 forecast at 12.8 million units. Edmunds reports a “somber atmosphere” from the Detroit Auto Show, and “is forecasting 12.9 million for 2011.”
But then, Paulsen isn’t in the car business, he is flogging stocks. Especially car stocks that “may again have a good year”, Paulsen writes. Let’s hope so.