American Auto Earnings Show Signs of Beating Best of 90s
By Keith Naughton and Craig Trudell - Sep 5, 2013
The 17 percent surge in U.S. auto sales last month pushed the annual rate to a pre-recession, boom-time level. Even more significant, Detroit automakers are reaping profits not seen since the turn of the century.
Sales totaled 1.5 million in August, the most in one month since May 2007. What’s more, the automotive comeback crossed an important milestone as the industry’s annual selling rate reached 16.1 million, the fastest since October 2007 and a volume that signifies a robust car market.
As the fifth anniversary of the collapse of Lehman Brothers approaches, Detroit has come full circle, from bankruptcy to boom. General Motors Co. (GM), Ford Motor Co. (F) and Chrysler Group LLC combined to earn $13.5 billion last year, even as industry sales were 17 percent below the peak of 17.4 million set in 2000. Those fatter profits come from trimmer companies that radically restructured operations, shed debts and overhauled their lineups to field their most competitive cars in a generation.
“Any question that the industry is back should be put to rest,” said Jeff Schuster, auto analyst for researcher LMC Automotive. “In 2007, there was no margin on cars; the Detroit Three were giving them away. Now we’re seeing a much different environment, where they’re much more competitive.”
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http://www.bloomberg.com/news/2013-09-05/american-auto-profits-showing-signs-of-beating-90s-best.html
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