The Next Five Days: Rust Belt Renaissance

Welcome to the inaugural edition of The Week Ahead. I'm sure that normally you rely on other sources to see a compiled list of all the important releases for the upcoming trading week. This column endeavors to pull out a few key items and put the forecasts into some kind of context.

The Detroit Bounceback

We've been witnessing the steady decline of the industrial base since I was in eighth grade (1978 for those keeping score). But the falling dollar could prove to be a long-awaited elixir. Simply put, it is becoming notably cheaper to build products in Youngstown than in Munich or Marseilles.

That's why I'd be a buyer of auto stocks next week -- soon after the monthly auto-sales figures are released on Tuesday, April 1. The numbers are likely to be weak, as the U.S. consumer remains on the sidelines.

But in coming weeks and months, look for a string of positive headlines in the sector that should herald a renaissance in Detroit and elsewhere.

Volkswagen ditched its U.S. plants 15-20 years ago, citing the then-strong dollar. The German automaker now appears set to announce plans to start producing cars again in the U.S. Jochem Heizmann, head of VW's production, has said that 80% of the content in the cars would also be domestically produced, according to autoblog.com.

VW has admitted that the Passat should be about $4,000 cheaper, but being built in Europe, that simply isn't going to happen. All told, the company hopes to build 250,000 cars annually, though some of those vehicles may be for other VW brands, such as Audi, SEAT and Skoda.

In a similar vein, BMW has announced plans to boost its manufacturing capacity in South Carolina, while trimming German production. If Daimler's inexpensive SmartCar proves to be a success on our shores, then U.S. production is likely inevitable.

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David Sterman has been an equity analyst and financial journalist for 15 years, most recently serving as Director of Research at Jesup & Lamont Securities.