Wednesday, April 6, 2011

Will Ford (F), GM (GM) Gain Share on Japanese Woes?

The idea is floating around that American automakers like Ford Motor (NYSE:F) and General Motors (NYSE:GM) could gain some significant market share on the premise Japanese automakers such as Toyota Motor (NYSE:TM), Honda Motor Co. (NYSE:HMC) and Nissan Motors (OTC:NSANY) are more exposed to parts shortages as a result of the earthquake in Japan.

Deutsche Bank (NYSE:DB) analyst Rod Lache noted, “We continue to believe that U.S. auto makers will be only moderately impacted by supply shortages. Therefore, we believe that they will have relatively higher inventory and thus higher market share.”

He concluded share gains of 2% to 3% for General Motors and Ford Motor to more than offset the lower sales figure he models, which will drop from 13 million to 12.5 million in the U.S. in his estimation.

The though seems not to be how many parts will be disrupted, as that will obviously be in relationship to the Japanese auto makers, but what parts will be scarce.

If a major part is needed by American auto makers, it won't matter if they only have shortage on 6 parts and their Japanese have shortages with 150 parts. If auto manufacturers are short on a part that affects rolling out a product, it won't matter the number of parts that are short.

There is also the issue of transporting of parts, which is connected more to Toyota than the rest of the companies.

But assuming all parts will be accessible to American auto manufacturers, than they obviously will have a clear advantage in the months ahead. That's still not a guarantee though, and it may not be as clear as it appears when looked at from the point of view of vital parts.

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