Fortune

WHY SELF-DRIVING CARS COULD HELP AUTO STOCKS DO A U-TURN

Like clockwork, automakers’ stocks get pummeled when the economy slows down. But autonomous-driving technology could help the industry break that cycle.

ONE OF THE AUTO INDUSTRY’S worst attributes, from an investor’s standpoint, is its predictability. While car companies benefit when the economy rises, the road always turns back downhill, and automobile sales inevitably shift into reverse.

Industry watchers can see this dynamic playing out right now, even as 2017 models begin to roll onto dealers’ lots. In the first half of this year the auto industry’s revenues hit $151.8 billion, up 7.8% from the previous year. Vehicle sales are on pace to top the nearly 17.5 million cars and trucks sold in 2015. But the current run is “in extra innings,” says Adam Jonas, an analyst for Morgan Stanley: After six years of almost uninterrupted growth, August car sales dropped a sobering 4% year over year. And investors are already

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