Automobile Industry and the Recession
By Brenda Williams 

Automobile industry has a special impact on the daily life of the modern day man, which requires fast mobility with reliability. The rapid growth in automobile industry has had its ebbs and flows. Currently it is undergoing a recession globally. The auto industry is evolving new strategies and signing up new contracts and joint ventures in an effort to stabilize itself and avoid further slump.

There is a particular need for rationalization of taxation and customs policies in order to support enterprises producing automobile components.

Automobile and automotive parts & components manufacturers make the major portion of the automotive industry throughout the world. Automobile manufacturing sector consists of truck manufacturers, motor vehicle body manufacturers, motor vehicle parts and supplies manufacturers. This is engaged in manufacturing of automotives and light duty motor vehicles, personal utility transport vehicles and chassis, cabs, trucks, automobile and utility trailers, buses, military small and heavy vehicles and the main parts of the motor vehicle engines.

In 1997, the majority of automobile construction enterprises have passed through the lowest critical point and began to increase production volume, restructuring themselves while taking into account consumer requirements, their solvency, and the overall economic situation. Thus, in the first six months of 1997 there was a substantial increase in the volume of production compared to the corresponding period in 1996.

The global automotive industry is highly diversified and includes different sectors like manufacturers, suppliers, dealers, retailers, original equipment manufacturers, automotive engineers, spray painters, motor mechanics, auto electricians, aftermarket parts manufacturers, body repairers, fuel producers, environmental and transport safety groups and even many of trade unions.

The global leaders in auto industry are United States, Japan, China, Germany and South Korea. The United States of America is the world’s largest producer and consumer of motor vehicles and automobiles accounting to almost 6.6 million direct and indirect-jobs. Automobile industry is one of the significant ones in the world that provides employment to 25 million people across the globe. This industry is largely dominated by the five giant automobile manufacturing corporations namely Toyota, General Motors, Ford Motor Company, Volkswagen AG and Daimler Chrysler. These corporations have their presence in almost every country of the world and they continue to invest into production facilities in emerging markets namely Latin America, Middle East, Eastern Europe, China, Malaysia and other markets in Southeast Asia. To overcome certain production costs many mainstream auto corporations have established there units worldwide.

Engine parts form one of the largest segments of the automotive components industry. The latest trend in this sector is of outsourcing a part of the engine to different vendors who provide good comparative technological expertise as well. Recently auto industry is going through its worst periods. The global giants are facing the toughest economical crisis. This is also resulting in heavy losses to the work force in the form of lost jobs. There are varied factors behind this decline of automobiles industry that have badly affected it as a whole. Nonetheless, it is hoped that this industry, which is an integral part of the modern day life and has stood the test of time in previous recessions, has the tenacity and the resilience of bouncing back once again.

 Have Discount Auto Parts and Dollars Store Stocks Run Their Course?
By Lance Winslow 

During the 2008-2009 US recession folks were amazed how well a few retail sectors had done when all the other companies were tanking. How is it possible that auto parts retail chain stocks were not crushed as all the other retail stocks were in the proverbial toilet? Now it has always been said in the automotive industry that during hard economic times, folks do not go out to buy new cars and therefore they are forced to keep their old cars and fix them up.

It thus, stands to reason that discount auto parts are a natural and perhaps somewhat recession proof. That does not mean they are going to break any speed records rather merely that they can survive without taking the huge hit in sales. Still, is this a reason for the stock to jump 350%? No, the answer is no, instead they just should not go down like the others. So, why the flight to these so-called recession proof, really recession resistant, stocks?

The next interesting and perhaps also predictable recession resistant stock is that of the Dollar Store type businesses. Still during this last recession the stock prices rose on some of these companies by 200%, and yet Wal-Mart, which is an extremely well-run company, was flat, stock price actually down a little in fact, so one has to ask why?

With this in mind one would have to say that these stocks have run their course and it’s time for anyone who rode them up, to take their profit now and get into more solid companies with a long-term mind set. Consider all this.