The Real Story Behind the U.S. Auto Bailouts
"It's distinctly possible," said Doug Roberts, chief investment strategist of ChannelCapitalResearch.com. "Heavy trucks -- most of them are used for small businesses, so at some point it's like you have to get a new truck and you may have postponed it during all this time, and then all of a sudden if you can do an accelerated depreciation on new equipment, you think, 'OK, now it's a good time to buy a new truck.'"
Roberts pointed to the Cash For Clunkers program, which he said had a solid spurt before it finally began to fade out.
Traders and analysts aren't certain what the end of accelerated depreciation means for the auto industry, and it's tough to say with all of Europe's uncertainty which direction American car sales will trend in the future. Possibly China.
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"China's a strong market for them, it comes down to the contribution that China is going to make to the income statement," said Alex Potter, senior equity analyst at Piper Jaffray. "It is still dwarfed in comparison to the U.S. and right now you're probably looking at maybe 15% to 20% of the
Potter warns that China, though a bright spot for GM and others, likely would not be able to carry the load if matters worsened in the United States and Europe.
"If people get nervous about the U.S. and if the concern on Europe doesn't go away, then those two things will trump any amount of strength in China just because of how significant the impact could potentially be on the income statement," said Potter.
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The UAW, Obama campaign and Romney campaign declined to officially comment for this story. The Republican National Committee did not return three calls for comment requests.
-- Written by Joe Deaux in New York.
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