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Alan Mulally, president and CEO of Ford Motor Co. (NYSE: F), said Wednesday that he expects U.S. auto sales to rise during the next two years. Vehicle sales in 2009 are expected to range between 10.5 million and 11 million units, and Mulally predicts that number will increase to 12.5 million in 2010 and 14.5 million in 2011.
"It has started to pick up right now because we have had the stimulus packages," said Mulally, speaking before reporters in India. "So, it will be up a little now, then will go down. But overall in the long term, the sales will grow with the GDP number." The CEO added that Ford expects to be profitable by 2011.
Mulally was in India Wednesday to unveil Ford's new Figo, the company's first small car to be produced in India. The four-door hatchback will be produced at a factory in Chennai, and the automobile is scheduled to go on sale in India in early 2010.
Ford shares are broadly higher at last check, extending their impressive year-to-date gain of more than 206%. Wednesday's jump pushed the stock above its 10-day and 20-day moving averages, which have acted as short-term resistance since mid-August.
Mulally's upbeat comments appear to have inspired some bullish speculation in the options pits. Within the first hour of Wednesday's trading, option players sent 21,136 contracts across the tape on Ford's October 8 call, which carries open interest of 23,162 contracts. Most of this volume changed hands at the ask price, indicating buying activity, and implied volatility was up 7% at last check.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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Reader Comments (Page 1 of 1)
9-23-2009 @ 4:59PM
al coholic said...
With the average age of cars on the road rapidly approaching 10 years it doesn't take a genius to figure out that new car sales in the next few years will rise.
Ford is in the catbird seat right now with quality products and the right to claim that they pulled themselves up by their own bootstraps unlike the other two. Ford is also benefiting from the fact that America now realizes that buying American doesn't necessarily mean compromising quality.