I just flew over one of my favorite leading economic indicators only yesterday. Honda (HMC) and Nissan (NSANY) import millions of cars each year through their Benicia, California facilities, where they are loaded on to hundreds of rail cars for shipment to points inland as far as Chicago.
Five years ago, when the US car market shrank to an annualized 8.5 million units, I flew over the site and it was choked with thousands of cars parked bumper to bumper, rusting in the blazing sun, bereft of buyers. Then, ‘cash for clunkers’ hit. The lots were emptied in a matter of weeks, with mile long trains lumbering inland, only stopping to add extra engines to get over the Sierras at Donner Pass. The stock market took off like a rocket, with the auto companies leading.
I flew over the site last weekend, and guess what? The lots are full again. During the most recent quarter, demand for new cars raced up to an annual 16 million car rate. Japanese cars are selling so fast in the US that they can’t load them on to trains fast enough.
Sorry the photo is a little crooked, but it’s tough holding a camera in one hand and a plane’s stick with the other, while flying through the turbulence of the Carquinez Straight. Air traffic control at nearby Travis Air Force base usually has a heart attack when I conduct my research in this way, with a few joyriding C-130’s having more than one near miss.
Buy more of the Japanese stock market (DXJ)?
