NEW YORK (TheStreet) -- Keep the pedal to the metal on automaker stocks in 2014.
"I think we are going to have another good year in 2014," says Efraim Levy, equity analyst for S&P Capital IQ. "Even if interest rates increase, I don't think it will have a large impact on demand because the economy is improving and a slight increase in car payments won't stop you from buying a car, especially if you have a new job and you need to get to work."
Levy sees 16.1 million new light vehicles hitting the road in the coming year, a 3.3% rise from last year's estimate of 15.6 million. He expects GM (GM) to lead the way in the next 12 months. GM made huge strides in 2013 with the appointment of Mary Barra as its new CEO, as well as Uncle Sam finally selling its stake in the company. Shares of GM finished up 41% in 2013, a full 12 percentage points better than the benchmark S&P.
"We are talking about a company that's solidly in recovery mode," says Levy. "There will be a lot of continuity, but there will also be her imprint going forward, so we expect good things."
Levy is also bullish on GM rival Ford (F) which saw its shares rise around 19% in 2013. And he believes Ford CEO Alan Mulally will finish the year at the company, despite rampant rumors that he is a candidate to replace Steve Ballmer at Microsoft (MSFT).