Thursday, March 13, 2008

General Motors and Ford to Suffer Share Drop

The automotive sector of US will go through a rough patch in 2008 as the auto makers are facing high gasoline prices and the tightness in the credit market. Morgan Stanley 2008 U.S. industry forecast shows that GM and Ford will experience loss this year. General Motors is also facing strike of major suppliers. So, it is almost certain that Auto makers would have a tough time this year.

Guardian reported:

"Our industry view is based on expectations of lukewarm retail demand, weak mix, high raw material prices offset by growing strength in international markets and some progress toward attacking structural issues including overcapacity and legacy costs," Morgan Stanley said in a note to clients.

So, the shares of the companies will also be dropped significantly this year. GM would see 7.6 percent drop, while Ford will experience 8.07 percent drop this year. US economy is in recession which is affecting the automotive market of the country. Now, let us see how the companies like GM and Ford cope up with the situation and go on with their business activities.