US New Car Sales Up, Automotive Stocks Up image

As US auto sales have continues to increase over the past three years, so did stock prices for the several automakers.

Ford, GM and several other global suppliers have seen the stock prices surpassing the Standard & Poor’s 500 index during the first five months of this year. The S&P 500 has increased 14% from January to April, but GM and Ford shares have jumped 18% and 21% respectively.

Fiat, which has been struggling with the economic crisis in Europe, has seen its stock price rise 62% so far this year on the Milan Stock Exchange, much of that coming the past week amid reports that banks will offer a loan of $10 billion to purchase the rest of Chrysler.

“People who were very negative on this segment six months or eight months ago are coming to the realization that there is something real going on here,” said Citi Investment Research auto analyst Itay Michaeli. “I think we are still only in the early innings.”

Most part of this gaining comes from the US, where pickup sales are increased due to the housing recovery. Consumers who have seen their credit scores affected by the economic crisis 4 years ago, find lenders more willing to finance auto loans.

Source: freep.com