General Motors shares soared 7% yesterday.

General Motors (GM) delighted investors with the news that the semiconductor crisis gradually began to fade in the 4th quarter. Representatives of the automobile concern also stated: they expect that in 2022, “economic growth in the United States and increased availability of semiconductors” will lead to an increase in total passenger car sales in the United States to 16 million (from 15 million) in 2021. Investors by the fact that Toyota Motor Corporation (TM) (TM) sold more cars in the United States for the first time than the Detroit automaker. 

Such a favorable market reaction is likely associated with the hope that the company will increase car production this year as the logistics crisis resolves. In general, the topic of automakers is fascinating. But, do not forget: traditional companies in the industry look more than undervalued by their coefficients. And the main reason here is a drop in sales due to a shortage of components. 

At the same time, we remember that car prices have soared due to unsatisfied demand and other inflationary reasons. And the margin of producers, subject to the growth of production volumes, will be pretty decent. As soon as the increase in supply volumes begins (and, as we know, the unsatisfied demand for many cars is exceptionally high), we can expect a significant rise in automakers’ profits.