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The good economic conditions in the US are benefiting the automobile and truck industries and demand is being fueled by growing disposable income, strong consumer confidence and good job growth. However, competition is intense for market share in the US, and the product mix is likely to change in the future. These stocks are timely in the 3rd qtr of 1999 and value-minded investors should find some good selections in this industry.

US sales of automobiles and light trucks are expected to decline in 1999 to 15.5 mil units from the 15.6 units sold in 1998, due mainly to lower US economic activity and softer North American demand. Automobile industry labor problems with the United Automobile Workers have improved in recent years, but there is a possible strike on behalf of car haulers by the Teamsters Union. These stocks are expected to perform well, with Ford Motor Co one of the better selections for investors.

Auto industry stock prices, as of Sep 1999, are about 20% below their July highs. Auto stocks therefore present a good long-term buying opportunity. Their total-return potential through 2003 is good. Auto stocks also offer healthy dividend yields to income-oriented investors. US vehicle sales are expected to total 15.16 million in 1998, reflecting low interest rates and decent personal income and consumer confidence levels.