Auto industry predictions

Phil LeBeau from CNBC made some predictions the other day about the U.S. auto industry.  A couple:

1. Chrysler will be sold.

This isn't hard to imagine. The company is a shell of what it once was, it has just enough cash to stay out of bankruptcy, and the parent Cerberus wants to unload the company. The Big 3 will turn into the Big 2.

2. General Motors will shed brands as it restructures.

CEO Rick Wagoner loves all of GM's brands and will defend GM having eight, but with its bottom line being squeezed, I predict GM will want to free up research, marketing and overhead costs. Don't be surprised if one, and possibly more of GM's brands go on the block.

3. A Chinese auto maker will buy its way into the U.S. market.

Companies like Geely and SAIC have the desire to get a footprint in the U.S. and in a down market, '09 could be the time to buy a U.S. brand or slice of an auto maker.

6. Going electric will charge up.

The push to develop electric models will pick up steam as the Obama administration encourages the industry and private research labs to continue pushing the envelope with electrically-powered vehicles.

7. Fiat will return to the US

The Italian auto maker wants to get back in the states and it has the chance to do so if it can buy a U.S. brand and the dealer network that goes with it.

If these predictions are even close, the takeaway is more foreign ownership of what was once an American industry.  It strikes me, though, as tough sledding for whoever owns the companies.  Given the uncertainty of the economy, car sales are way way down.  It's no short term investment, to be sure.