Kelley Blue Book sees U.S. auto sales of 16.3M units this year to rep a growth rate of 4.9%. One of the biggest risks to the industry is a bump in interest rates to a level where buyers are pushed away from purchasing new cars. Industry watchers think the luxury sector (VLKAY, BAMXY, DDAIF) could see the sharpest impact as consumer previously willing to stretch trade down.
Ford's (F) increased use of aluminum in the widely popular F-150 line will be in focus. Analysts think could consumer reaction could go either way. Rival truck makers like Ram (FIATY) are set to pounce if the aluminum concerns show any validity.
Japanese automakers (NSANY, TM, HMC, MZDAY, SZKMY, FUJHY) are betting big on growth in the U.S. as tensions in China continue to crop up and clip sales from climbing to full potential .The group is seen as likely to use incentives and promotions in the U.S. to gain market share if sales momentum slows.
Toyota vs Telsa: Top execs with the two automakers have dialed up the rhetoric on the use of hydrogen fuel cell cars despite being long-time partners. With the Toyota (TM) FCV and Tesla (TSLA +4.5%) Model X both slated for a 2015 launch, the remainder of this year could see the war of words escalate.
A spokesperson for China's Foreign Ministry keeps a hard line on Japanese Prime Minister Shinzo Abe, saying Chinese leaders will not engage in dialogue with the leader and that he will not be welcome in the country anytime soon.
The defiant tone from Beijing isn't any help to Japanese automakers (NSANY, TM, HMC, MZDAY, SZKMY, FUJHY) as they hope to avert the type of backlash by consumers against their brands which was seen last year.
The danger to the group is real, according to China Car Times. "Animosity towards Japanese products has been lurking at the surface of the Chinese consumer market for some time, and usually boils over when political issues reach the headlines."
Car makers in Japan are preparing for a backlash in China after Japanese Prime Minister Shinzo Abe made a pilgrimage to a shrine for his country's war-dead on Mao Zedong’s birthday.
Abe's visit to the memorial, which, among others, honors war criminals from World War II - when Japan invaded China - drew a sharp rebuke from the latter and comes amid rising tensions over sovereignty of islands in the East China Sea. A flare-up in that dispute last year led to a sharp fall in sales of Japanese cars in the Middle Kingdom.
Rivals such as Volkswagen (VLKAF) and GM (GM) could benefit from any drop in sales of Japanese vehicles, with the German company set to regain its crown as the largest foreign carmaker in China. VW and GM have sold over 3M cars each in the country.
The dizzying week for General Motors (GM -0.8%) after its announcement of a fresh CEO, global cutbacks (South Korea, Australia, Chevrolet in Europe), and imminent exit by the Treasury Department as an investor gets even more interesting as it reveals one of the biggest goals of all for the company.
The automaker plans to make a serious push in Indonesia where Japanese automakers (NSANY, TM, HMC, MZDAY, SZKMY, FUJHY) outsell it by a huge margin and its market share is just a shade over 1%.
In a clever move, GM has been watching what works for rivals in Indonesia before deciding which segment to jump into and who to partner with in the country of 247M people.
The U.S. has involved itself in the latest flare up of the islands dispute between Japan and China in the East China Sea by flying two unarmed B-52 bombers in the area without informing Beijing.
The U.S. moves comes after China included the islands - known as Senkaku in Japan and Diaoyu in China - in an Air Defense Identification Zone, and warned that it would take military action against airplanes flying in the region without notification.
Meanwhile, Japanese airlines have also defied Beijing and flown through the area without providing China with flight plans.
At stake in the row are fishing rights and access to up to 160B barrels of oil.
When the dispute first flared up a year ago, trade between China and Japan was badly hit, with the latter's car makers suffering in particular.