US automobile industry is on a joyride. A recent survey shows an increase in light vehicle sales. The year over year light vehicle sale is standing at 1.61 million units in May 2014, which is 11% increase from the previous year. Strangely enough, the sale went down in January and February. The year to date sale has seen 5% increase and stood at 6.75 million units.
Experts believe the poor sale in the beginning of the year was due to bad weather. But right after that, the sale started to pick up pace. For last three consecutive months, the seasonally adjusted annualized rate (SAAR) stayed over 16 million. In May the SAAR hit 16.8 million. This was highest since July 2006.
Almost all automobile manufacturing giants reported impressive sale. General Motors sold 284694 vehicles, which was up 13% from May 2013. Toyota Motor and Nissan Motor also reported rising sales figures. For both companies, year over year sales percentage increase was in double digit. Another automobile company Ford Motor posted its best may retail sales in last 10 years.
The whopping sales figures of automobile manufacturing companies have left the economist wondering. Some of them held the macroeconomic factors responsible for the sudden upsurge in auto sale. Truth is, the automobile industry by nature is cyclical and as US economy is gradually recovering, consumer spending is on the rising side and interest rates are low. Besides, banks are lending money for buying cars with long periods for repayment. As a result of all these, the automobile sale is increasing.
Industry experts have picked three auto stocks that are worth buying. These stocks are;
Cooper Tire & Rubber Co.
Cooper Tire & Rubber Co. (NYSE:CTB) is based in Ohio. The company manufactures tires and other car products. On the basis of sales, Cooper tire is the 4th largest tire company in North America and 11th largest internationally. The stock is currently being traded at $29.64, which is up 0.71%. Its market cap is $1.87 billion.
Standard Motor Products Inc.
Standard Motor Products Inc. (NYSE:SMP) is located in Long Island City, New York and manufactures and distributes automotive replacement parts in US. It is famous for engine management and temperature control products. The stock is being traded at $43.66, up 0.48% from previous day’s closing.
Magna International Inc.
Magna International Inc. (NYSE: MGA) is a Canadian company. Its headquarter is in Aurora, Canada. Magna International is a leading manufacturer and supplier of automotive components. It manufactures and assembles automotive systems. The stock is being traded at $107.88, which is up 0.45%.
The rising sale and vibrant market indicates further growth of the US auto industry. So let’s hope the industry will continue to do well in the future.