U.S., Japanese Auto Stocks Sink, Recession Looms Large

Glenn Swanson
by Glenn Swanson

You can bet that more than a couple of Detroit execs are monitoring today’s Fed rate cut and U.S. stock market slide, wondering if this is it. Meanwhile, BusinessWeek’s Autobeat reports that Japanese automakers' stock prices are suffering alongside The Big 2.8's. Compared to year-ago prices, Mazda’s stock is down 45 percent, Toyota’s is off by 32 percent and Honda’s stock price has dipped 35 percent. This despite the fact that all the automakers expect to post record earnings in March. The underlying logic: when the U.S. economy sniffles, the rest of the world feels a head cold coming on. Long term, bigger picture, Autbeat says Japanese automakers “strong sales in emerging markets” should offset the coming U.S. slowdown, and their range of fuel-efficient offerings put them in a good position to profit from higher U.S. gas prices. Not to mention the fact that if a full-on recession throws one (or more) of The Big 2.8 into Chapter 11, the last men standing will get one Hell of a dead cat bounce.

Glenn Swanson
Glenn Swanson

Glenn is a baby-boomer, born in 1954. Along with his wife, he makes his home in Connecticut. Employed in the public sector as an Information Tedchnology Specialist, Glenn has long been a car fan. Past rides have included heavy iron such as a 1967 GTO, to a V8 T-Bird. In between those high-horsepower cars, he's owned a pair of BMW 320i's. Now, with a daily commute of 40 miles, his concession to MPG dictates the ownership of a 2006 Honda Civic coupe which, while fun to drive, is a modest car for a pistonhead. As an avid reader, Glenn enjoys TTAC, along with many other auto-realated sites, and the occasional good book. As an avid electronic junkie, Glenn holds an Advanced Class amateur ("ham") radio license, and is into many things electronic. From a satellite radio and portable GPS unit in the cars, to a modest home theater system and radio-intercom in his home, if it's run by the movement of electrons, he's interested. :-)

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  • 50merc 50merc on Jan 22, 2008

    Donal, if Renault-Nissan hopes to sell lots of electric cars in Israel, more power to 'em. But surely the article's reference to building "500,000 electric service stations in the country" is incorrect. Israel's population is about 6.5 million, with under 3 million in the labor force. That would mean about a half-dozen workers per electric service station. The country's land area is 20,330 square kilometers. That would mean about 25 electric service stations per square kilometer (or about 65 per square mile).

  • GS650G GS650G on Jan 22, 2008

    Although I think we are going to be using oil for 100 more years at least, it would be fun to watch alternative means of power be developed. This is what OPEC was afraid would happen if oil took off in price, and once alternatives are found there will be no going back.

  • Yankinwaoz Yankinwaoz on Jan 22, 2008
    500,000 electric service stations in the country Perhaps every power outlet in Israel is considered an "Electrical Service Station"? I can count 6 in this room I'm sitting in now.
  • Donal Donal on Jan 23, 2008

    OK, here's a more likely scenario: Automaker Renault-Nissan will manufacture the cars and Better Place, a California start-up founded by former SAP executive Shai Agassi, will build the infrastructure, which may eventually consist of 500,000 charging points and up to 200 battery-exchange stations. http://www.time.com/time/world/article/0,8599,1705518,00.html I guess the charging points would be in parking lots and home garages.