AUTO Wall Street sees plenty to worry about as sales stall
Jul 01, 2007 | 06:43 AM
Despite a few uncertainties, the automotive market appears to have momentum going forward.
"Long term, the automotive production and consumption markets look good," said David Martin, steel analyst at Deutsche Bank Securities Inc., New York. "Foreign owners of U.S. assets want to sell to that market, even though domestic car manufacturers continue to suffer at the hands of the transplants."
With most transplants opting to set up plants in the South, Martin expects more and more steel investments will be made where those plants are located, meaning less in the Northeast and more in the Southeast. Offshore producers of cheaper slab, mostly in Brazil, pose a threat to U.S. steel mills and might even invest in U.S. rolling facilities, he said.While he doesn't expect any significant increase in interest rates that would impact consumer spending, Martin wonders how many Americans are financing their auto purchases through home equity loans at a time when the housing market is showing signs of weakening.....
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