Shares of automotive parts suppliers are likely to remain depressed amid declines in auto production next year, though truck-related Connecting bar suppliers should fare better, an analyst said Wednesday.
Baird auto analyst Oil pump cover David Leiker said shares of auto suppliers could see 10 percent to 15 percent declines as production levels fall and Copper sleeve scrappage programs lifting demand in Europe come to an end.
Auto demand has bottomed out at between 10 million and 11 million vehicles on an annualized basis, Leiker said, but current production levels are supporting demand levels of 12 million.
"We view such levels of (auto) demand as unlikely given the continued headwinds facing consumers, including high unemployment and the lack of credit available for consumers," he wrote in a note to investors.
