Ford’s European repair job may need outside help 10 Jan 2019 If boss Jim Hackett hits long-term profit targets, the carmaker’s market value could rise by $10 bln. Yet that requires implausible cost cuts. Partnering with or selling to a continental rival might be better. Peugeot’s purchase of GM’s European arm shows both sides can benefit.
Beijing U-turn hints at silly season for subsidies 9 Jan 2019 The state planner is hinting at measures to increase domestic consumer spending on cars and appliances. Any tax cuts or handouts would be a short-term fix that shifts focus away from efforts to cut excess capacity. It underscores China’s determination to prop up the economy.
Ghosn puts up his freedom as bond for his legacy 8 Jan 2019 The deposed 64-year-old automaker CEO has declared his innocence. Given Japan's 99 pct conviction rate, he could face a decade in jail. Ghosn may hope prosecutors back off. Either way, the man who saved Nissan creates space to pull off another unprecedented rescue - of himself.
Geely flags Chinese car pileup ahead 8 Jan 2019 The $13 bln automaker is forecasting flat sales for the year ahead, following a 20 pct rise last year. Demand is cooling after years of blistering growth, forcing companies to downshift. Politics and over-investment are mostly to blame, but that’s scant comfort to investors.
Elon Musk steers Tesla toward bad old Motown ‘hood 2 Jan 2019 The electric-car maker’s CEO might sustain demand by cutting prices to offset a reduced tax break for buyers. But that could slash earnings in half. Putting volume over profit was one of Ford and GM’s pre-crash mistakes, hurting quality too. Musk is driving down a similar road.
Tech to disrupt supply chains more than trade wars 2 Jan 2019 U.S. President Donald Trump’s tariffs give global companies an incentive to manufacture locally. But the shift was already underway because of new technologies like automation. Carmakers and pharma groups will localise more production in 2019 even if tensions over commerce abate.
Truce brakes Evergrande’s bad bet on Tesla wannabe 2 Jan 2019 The Hong Kong-listed conglomerate has ended a legal spat with electric-vehicle developer Faraday Future over a soured $2 bln investment. It seems unlikely that Evergrande's stake in the troubled Chinese carmaker will ever pay off, but this deal at least limits the downside.
Larry Ellison is anything but a check on Elon Musk 28 Dec 2018 The Oracle founder calls himself a “very close friend” of the Tesla CEO and owns nearly $1 bln of the automaker’s stock. He also shares an imperious style and penchant for outsized pay. Musk’s SEC deal mandated an independent director, but Ellison is unlikely to rein him in.
East Africa will buck global great rift trend 20 Dec 2018 Twenty-five years after genocide, Rwanda’s economy is motoring sufficiently to need new markets. The potential inclusion of Ethiopia would make East Africa a single market of 250 million people. If it prospers, it would provide a useful counterpoint to global balkanisation.
Renault-Nissan: Only merging makes financial sense 19 Dec 2018 The French and Japanese carmakers' lopsided stakes in each other are a poor use of capital. A full-blown marriage could boost their value by about 30 percent. That’s less likely after Carlos Ghosn’s ouster as Nissan chairman; the auto alliance is driving in the wrong direction.
Shinzo Abe will strike accord with Donald Trump 19 Dec 2018 With some 5 mln autoworkers to protect from tariff pain, Japan’s prime minister will have little choice but to sign a bilateral U.S. trade deal. Expect the new NAFTA’s anti-China clause to feature. Seeking warmer relations with Tokyo, Beijing is apt to look the other way.
Didi will seize the wheel of a Chinese carmaker 17 Dec 2018 The $56 bln ride-hailing firm has tied up with the likes of Toyota to develop vehicles and services, as lines between tech firms and auto manufacturers blur. Boss Cheng Wei, inspired by falling valuations in China’s car sector, will deploy Didi's $12 bln cash pile to buy a brand.
German carmakers could show Trump art of the deal 14 Dec 2018 VW, Daimler and BMW are vulnerable to 25 pct auto tariffs threatened by the U.S. president, who’s also railing against GM for idling plants. The Germans could win some goodwill by taking up some of their American rivals’ spare capacity. That’s easier done for some than others.
Peugeot boss has better option to running Renault 13 Dec 2018 Carlos Tavares may be the most obvious European car executive to fill the Ghosn gap. But buying 22 bln euro Fiat Chrysler may be a more appealing alternative, so long as the Agnellis are looking to hand things over to the leader who best resembles the late Sergio Marchionne.
Activism anxiety will grip French establishment 12 Dec 2018 Between the state and raiders like Vincent Bolloré, France is no stranger to meddling investors. But this year some blue-chips will face cage rattling. Pernod is just the start. The likes of Saint-Gobain, Danone, Renault - and even Bolloré’s Vivendi - are no longer off-limits.
Ghosn’s jail time risks poisoning alliance talks 4 Dec 2018 Nissan's former boss, accused of understating his pay, could see out the year behind bars, a local paper says - without being charged. His harsh treatment widens the gulf between Paris and Tokyo, making a deal on future ties between the Japanese carmaker and Renault even tougher.
U.S.-China talks depend on speaking same language 3 Dec 2018 The two countries’ trade-ceasefire spin reflects different interpretations and priorities. Whether on auto tariffs or Chinese students in America, negotiators may struggle to restore norms before hostilities began, let alone go further – especially if starting points are garbled.
GM top-tier reshuffle may both boost and backfire 29 Nov 2018 The $52 bln carmaker’s second-in-command Dan Ammann is taking the wheel at Cruise, the unit that makes self-driving vehicles. The ex-Wall Streeter is the right person to whip it into shape and prepare for a possible IPO. But GM boss Mary Barra is losing her chief problem solver.
Viewsroom: Climate risk is investing opportunity 29 Nov 2018 Experts reckon unrestrained global warming will lop 10 pct off U.S. GDP by 2100. California’s wildfires prove it’s already having disastrous effects. But investors and companies alike can be part of the solution. Plus, Carlos Ghosn’s arrest leaves three carmakers in disarray.
GM’s Mary Barra has only one leg to stand on 27 Nov 2018 Pulling subsidies as revenge for the $51 bln carmaker cutting U.S. staff and plants – as President Trump has threatened - would be unfair. It might not even be possible. Trouble is GM remains a poster child for government bailouts. It’s a fight its boss can’t easily win.