Sirius XM has close ties to the auto industry and news in that sector impacts the satellite radio provider. While there has been talk and indicators that the auto sector is turning around, there has been little tangible evidence that such a recovery has legs. The disaster in Japan gave serious pause to thoughts of recovery, but the impacts seem to be manageable for the industry.
General Motors has now provided a real and tangible clue that the auto recovery is moving ahead. The company announced that they are investing $2 billion into 18 plants across the United States, and will be adding over 4,000 jobs. Overall the level of jobs at GM is not what it was just a few years ago, but this is the first major initiative in quite some time that commits dollars to the table and adds jobs on a large scale.
This news even overshadows small disappointments such as the incorrect rumor that Toyota would be resuming normalized production 2 to 3 moths early. Toyota denied the rumor, but did state that their goal was to be a full capacity as soon as possible. For the time being, that is targeted for the end of the year.
For Sirius XM the GM news is positive in that it is a concrete indication with dollars that the auto sector is indeed in recovery mode. The satellite radio provider relies heavily on the auto sector to produce satellite radio equipped cars. It is through promotional subscriptions in new cars that the company garners most of their self-paying subscriber growth. It is currently anticipated that the auto sector will sell about 13 million vehicles in 2011.