Big $ and the Auto Industry

Investors would be well served by carefully considering dollar announcements relating to auto industry results and activities in the context of the industry’s size.

For example, GM and Lyft recently announced an alliance and a $500 million investment by GM.  Lyft management has stated that the partnership reflects a common view on a number of aspects of the auto industry.

$500 million sounds like a lot of money, and it is.  However, for GM it represents about 16,000 cars.  GM is currently selling more than 200,000 cars per month and U.S. auto industry sales are expected to have exceeded 18.0 million in 2015.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®