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Ford Motor Company (F), General Motors Company (GM): Upswing Ahead, Coming From 16.3 – 16.4 Million Sales Rate And Cheap Fuel

Ford Motor Company (NYSE:F)’s stock price dropped almost 10% and General Motors Company (NYSE:GM)’s share value dropped about 24% year to date. However, the giant US manufacturers might see some upside as October was a favorable month, according to CNBC. This news comes on the back of the facts that markets have begun their spikes after the October effect and that oil prices have been on a downswing for the last period.

Ford Motor Company (NYSE:F)

“When you look at October sales, most believe that the sales rate, not actual sales but sales rate, is going to come in between 16.3 – 16.4 million. That’s a very solid month, not a spectacular month but a very solid one. The transaction prices are expected to be up less than 1%,” said Phil LeBeau.

Most of the leading automakers have seen their reputation put at risk by Takata and its explosive airbags. Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have obviously been affected and for the time being they cannot dump the safety supplier as there are no competitors that could cover the difference between supply and demand for airbags. Nevertheless, it is very likely that the US manufacturers will be reluctant to engage in contracts that might increase exposure to risks. There have been about 4 deaths related to this defect in airbags and many suggest that it can happen only in hot and humid areas, according to Reuters.  Now, the spikes in price are expected to be caused by the cheap fuel.

“Especially as gas prices have fallen, we’ve seen considerably more interest in large SUVs. Year to date sales for large SUVs up 17.2% and they’re being helped by these lower gas prices, especially with gas averaging under $3 a gallon nationwide,” informed Phil LeBeau.

Ford Motor Company (NYSE:F) seems a little more efficient in terms of managing the company’s price, antagonistically, General Motors Company (NYSE:GM) seems to be more risky and it can be seen in the bigger drop. However, this strategy should allow the company to jump back more powerful in case markets are favorable for growth.

Disclosure: none
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