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Gloomy Prediction: Auto Industry Will Lose 72 bn Euros

Morgan Stanley today published its latest forecast concerning the automotive sector, predicting that this side of the industry will lose no less than 72 billion euros in the next two years. The New York-based firm's predictions are obviously based on the continuously decreasing demand for new cars, an indirect consequence of the global financial crisis, which brought large companies such as General Motors close to bankruptcy.

Porsche was downgraded from “overweight” to “underweight”, World Car Fans reported today quoting Morgan Stanley's report, meaning that the German car manufacturer “will either not meet expectations, perform worse than other comparable companies, or both.” In addition, Fiat was relegated to “underweight” while Renault's ranking was upgraded to “overweight”.

Another gloomy prediction concerns the financial resources of the automotive industry, with companies working in this sector to lose no less than 72 billion euros. The auto market, however, will return to its normal status in 2012, Morgan Stanley mentioned in the report.

Morgan Stanley's forecast does nothing more than to confirm rumors related to a pessimistic future for the automotive industry. And beside all, large carmakers, and include here the three giant-members of the Detroit 3 group, admitted that bankruptcy may prove to be their only option in case no money is received from the government.

Although Morgan Stanley didn't say a word about the Detroit manufacturers, it's unlikely to see General Motors, Chrysler or Ford getting through 2012 without financial aid, especially when taking into account their desperate calls for help. But even worse, US government money may not save them from global recession, as some US lawmakers explained, with the loan package often regarded as an expensive method to delay bankruptcy...
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About the author: Bogdan Popa
Bogdan Popa profile photo

Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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