Executives at Autonet Mobile felt firsthand the effects of the auto slump. As car sales dropped 18 percent last year, growth in orders for Autonet’s in-car Web-access gear also trailed off.
But in recent months, order growth is up to a 30 percent monthly pace, vs. about 10 percent in late 2008. “We are seeing a larger number of reorders,” says Sterling Pratz, co-founder of Autonet. “As the car manufacturers come back in strength, we expect our sales to start coming back.”
Pratz is heartened by forecasts that suggest the slump in automotive sales may be nearing an end. Auto sales may rise in the fourth quarter before posting 5.7 percent growth in 2010, according to researcher iSuppli. That bodes well for a host of companies that, like Autonet, make high-tech electronics for cars. The group includes Delphi, Bosch, and Sirius XM.
GM Stigma Easing
For some analysts, optimism for the auto industry surfaced July 10 when General Motors exited bankruptcy. “There’s a number of consumers who have avoided GM cars because of the stigma” of the company’s decision to seek Chapter 11 protection from creditors, says Efraim Levy, an auto analyst at Standard & Poor’s, which like BusinessWeek, is part of The McGraw-Hill Companies. “Now the bankruptcy stigma should be easing.”
Carmakers may get another boost after July 24, when the federal government is set to release details of its “Cash for Clunkers” program, which grants rebates to people who replace old cars with new, more fuel-efficient vehicles. The rebates may increase car sales by 250,000 units, says Egil Juliussen, an analyst who covers the auto industry for iSuppli. The number would probably rise if the government increases the program’s available funds. “At least one more increase is certainly possible and maybe even likely,” Juliussen says. In Germany, car sales are expected to rise…