North American auto-production output in June was 1.093m units (up 99% YoY). Re-stocking of inventories is still going on in the economy, but we are due for a slowdown unless we see an uptick in employment and consumer confidence. These macro-indicators will probably lead unit sales in the future.
In terms of Japanese car companies, we expect a deterioration in earnings for Toyota (TM) given the strength of the yen and the end of government subsidies. Nissan (NSANY.PK) and Honda appear (HMC) to us as the best value in this environment.
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