Boston, MA 12/24/2013 (wallstreetpr) – Ford Motor Company (NYSE:F) issued its outlook for the year 2014, that was somewhat unpopular with its investors. The company announced that it expected its profits to shrink in the year as it adjusts its production and spend more in advertisement and marketing. But in this issue, there is also news for the steel industry.
It so happens that shareholders in auto industry naturally fall in love with steel industry stocks. Thus, it is important to keep an eye on what lies ahead for the steel industry following the announcement by Ford Motor Company (NYSE:F), and what other automakers are doing.
First and foremost, investors in Ford Motor Company (NYSE:F) stock reacted at the dim outlook issued by the company for next year, by selling off the stock, causing a value-loss. Naturally, investors don’t entertain what they consider weak guidance, especially from a company that has been growing in leaps and bounds in recent years.
Big vehicle rollout
Ford Motor Company (NYSE:F) is expecting to launch 23 new vehicles next year. Some of these vehicles will be targeted at the U.S market and global emerging markets. As such, next year will be a year of spending. However, thereafter, the company will be able to start reaping benefits from its investment. This means that huge profits will start streaming in by 2015.
Steel stock
Automakers have always used steel in body construction. But this is now changing, as there is a growing need for lighter and fuel efficient cars, which are also environmentally friendly. This means that the planned increase in production by Ford Motor Company (NYSE:F) may not mean corresponding benefit for the steel industry.
Steel companies such as AK Steel Holding Corporation (NYSE:AKS), Nucor Corporation (NYSE:NUE) and United States Steel Corporation (NYSE:X) always look up to strong auto industry for their growth. But their growth this time around, may not come from auto industry as automakers are shifting to aluminum for their auto body construction.
