Call Your Broker: Edmunds Predicts Strong Quarter For Automakers
If you are thinking of buying some stock of an automaker, now could be a good time. Not because of the strong sales. Because of dropping incentives, paired with strong sales. This indicates a strong first quarter, which should drive up stock prices.
February’s incentives came in at the lowest of any February since 2003, says the Edmunds.com’s True Cost of Incentives barometer. Edmunds.com reports that the average TCI per vehicle in February was $2,193, up 2.4 percent over January (MoM,) but down 14.5 percent from February of last year (YoY.) Says Edmunds.com Senior Analyst Jessica Caldwell:
“The decreased incentives spending across the industry so far in 2012 really underscores the healthy performance we’ve been seeing at dealerships nationwide. Car manufacturers know that consumers who deferred purchases in 2011 are still coming back to the market and by stepping back the discounts, they stand to pocket bigger profits. The first quarter of 2012 is shaping up quite well for automakers.”
Average True Cost of Incentives®
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Buy their stocks - riiiight, because the institutional speculators haven't done what they had to do already to the stock prices.
And once everyone buys on the news, the stocks will be driven down by a brief furor over the impact of oil prices on vehicle sales. Then they'll raise on stories about efficient car sales being strong. Then they'll fall when the news is dominated by dark clouds over the western economies. Fun with people who wake up every day like blank slates!
Calling my broker right now.. dont buy!!!