Sirius XM Radio Inc (SIRI) May Benefit From Rising August Auto Sales

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A small uptick in  auto sales could result in a big gain for Sirius XM Radio Inc (NASDAQ:SIRI). Fiscal 2014 is expected to be a stronger year for the auto sector and auto sales may reach its highest in 2015 and 2016. Sirius XM Radio Inc (NASDAQ:SIRI) may draw major benefits from these developments.

Sirius XM Radio Inc (SIRI) May Benefit From Rising August Auto Sales

Auto sales looks encouraging

After bullish sentiments in the Auto sector for the major part of the year, and a tiny bump in the second half of July, the sector once again looks pretty healthy in August based on the mid-month auto sales report, with an encouraging outlook for the full 2013. Separately, August is pacing well for the sector.

Auto sales are estimated to be over 1.4 million and may even rise to 1.5 million. One can expect a year over year gain in the range of 10 to 12 percent. Good performance in August will further strengthen estimates that overall sales for the full fiscal will come around to 15.5 million vehicles.

In August, new car sales will be around 1,478,000 units compared to 1,284,000 vehicles sold in the previous year. Auto sales in August are expected to be tremendously strong.

Consumers spending more on new cars

“This strong selling environment is occurring when consumers are spending more on new vehicles than any month on record, which is a further indication of the underlying strength of the sector,” said John Humphrey of the automotive practice at J.D. Power.

According to JD Power and LMC Automotive, North American light vehicle production in July increased 4 percent from the previous year fueled by continued lean supply to demand ratio. Taking into comparison the individual carmakers, South Korean companies Hyundai Motors and Kia Motors Corp have clinched on the highest production growth, which is enhanced by 14 percent. The majority of high outputs was contributed by Hyundai models Elantra Sedan and the Santa Fe crossover, says a report from Reuters.

Production for Ford Motor Company (NYSE:F) in North America surged 13 percent this year fueled by Escape crossover and Explorer SUV output. General Motors Company (NYSE:GM) saw a decline in production by 3 percent in the region, and the output from Fiat-Chrysler is more or less same.

North American production for European brands is down 2 percent through July, according to J.D. Power and LMC.

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