Toyota plots yet another jittery ride-hail route 13 Jun 2018 The Japanese carmaker is investing $1 bln into Asian startup Grab. It’s the latest in a slew of deals that mostly reflect manufacturer fears about where things are headed in autonomous driving and beyond. As GM’s fading Lyft alliance shows, though, the path is far from clear.
Tesla job cull is more signal than maneuver 12 Jun 2018 Cutting 9 pct of workers won’t tip the $60 bln electric-car maker into profit. Even if it halved its sales and admin budget it would probably still lose money this year. There’s a message in the economizing, though: boss Elon Musk is eyeing small things, not just the big picture.
Apax can find a bargain in UK used-car dealer 11 Jun 2018 Auction group BCA Marketplace has rejected a 1.6 bln pound bid from the private equity manager. It’s a bold move when sales are slowing, and UK consumers weak. Yet BCA is growing market share, and its margins look low. Apax could pay a 30 pct premium and still make a good return.
China’s giant battery-maker can outrun IPO hype 11 Jun 2018 CATL shares rose by the maximum 44 pct in its market debut. While such ardour is common in China’s frothy markets, the $12 bln local champion could live up to high expectations. Its success will also rev up demand for the next listings that ride the global electric vehicle boom.
Tesla shareholders box themselves into corner 5 Jun 2018 They ought to strip CEO Elon Musk of the chairmanship thanks to his sprawling responsibilities, production problems and recent outbursts. But investors helped make Tesla a personality-cult stock. Any direct attack on Musk risks undermining the electric-car maker’s fortunes.
Fiat Chrysler investors fear capital-junkie return 1 Jun 2018 Shares fell 7 pct despite boss Sergio Marchionne's pledge to pay a dividend, cut costs and double profit by 2022. The new plan also includes 9 bln euros for electric cars and a U.S. finance unit. That may worry owners that the CEO’s successor could fall off the spending wagon.
Fiat Chrysler revs up for new hair-raising ride 31 May 2018 CEO Sergio Marchionne is about to unveil the $32 bln carmaker's next five-year plan after hitting most previous targets. He has to show how the company can fix its stalling Europe unit while catching up on electric and self-driving vehicles, all without him at the wheel.
SoftBank-GM self-driving deal is more than a hedge 31 May 2018 The Japanese firm’s Vision Fund will invest over $2 bln in the U.S. carmaker’s AV unit. It’s betting self-driving cars become so huge that investing in future winners and losers alike will still pay off. The risk may not be spreading its bets too widely, but being too early.
Investors risk whiplash in car parts M&A standoff 31 May 2018 Shares in German headrest maker Grammer are trading 10 pct above an offer from Ningbo Jifeng. That’s optimistic. A big Bosnian investor is unlikely to counter-bid, and the Chinese group just needs another 25 pct to win control. Selling in the market may be the safest option.
Best to kick the tires on Chinese used-auto apps 30 May 2018 Investors from Tencent to TPG are filling the tanks of second-hand car startups. There may be lemons on the lot; sites linking individual buyers and sellers could stall. Those brokering for dealers and providing loans – such as Uxin, which just filed for an IPO – deserve a spin.
China is winner in German-Bosnian governance fight 29 May 2018 Manufacturer Ningbo Jifeng may offer to buy out other shareholders of Bavarian auto supplier Grammer. The Chinese group is offering a tiny premium and should make a healthy return. But a lowball exit may appeal to investors weary of a boardroom spat with Bosnia’s Hastor family.
Autos investors too quick to call Trump’s bluff 24 May 2018 German carmakers export a ton of vehicles, yet their stocks fell just 3 pct after the U.S. president threatened import tariffs. It implies they think Washington is just posturing, or that BMW and the like can mitigate the impact. That may prove to be overly optimistic.
U.S. threatens autos with scorched-earth gambit 24 May 2018 Raising the prospect of tariffs on all vehicle and parts imports may just be President Trump's fuel-injected bargaining ploy for NAFTA negotiations. If the levies actually happen, it could bring a few more jobs stateside. But it'd leave domestic and foreign automakers reeling.
Hyundai U-turn puts Asia investors in higher gear 21 May 2018 The South Korean conglomerate slammed the brakes on a $9 bln restructuring after investors revolted. It's a big step in a region where shareholders are often given short shrift. Alongside other recent upsets, Hyundai's is welcome evidence the balance of power is shifting.
Volvo’s $30 bln IPO bar is conundrum for bankers 15 May 2018 The carmaker’s Chinese owner Geely won’t sell for less, the FT reported. That means financiers have to either disappoint Chair Li Shufu and miss out on fees, or convince investors Volvo’s Autos 2.0 bets make it more a Tesla than a traditional manufacturer. Neither is palatable.
Volvo IPO will open road for M&A 11 May 2018 The Swedish group’s Chinese owner Geely may list the business it bought in 2010, profiting from a turnaround. That would raise cash for research and development and facilitate dealmaking. But a mooted valuation of up to $30 billion hinges on unrealistic Tesla-style multiples.
Viewsroom: What’s eating at Elon Musk? 10 May 2018 Tesla’s CEO berated analysts for asking “boring, bonehead questions” after the electric-car maker reported a record quarterly loss. He then taunted Warren Buffett, suggesting his idea of corporate “moats” is sugary nonsense. Breakingviews columnists discuss why Musk is so testy.
Investors shove three potatoes up Ford’s exhaust 10 May 2018 A majority of independent shareholders rejected the automaker’s long-term pay plan, want to scrap supervoting stock and reduced support for at least one director below 80 pct. It’s a significant rebuke, but the Ford family’s outsized votes insulate management from dissent.
Eddie Lampert takes self for ride on Sears do-over 9 May 2018 A deal to sell tires with Amazon added up to 20 pct to the struggling retailer’s stock, a boon to its CEO and biggest investor’s view that it’s undervalued. But his plan to prove that by buying parts of the business requires unrealistic assumptions about Sears – and his skills.
Supply-chain efficiency carries a cost 9 May 2018 Ford, ZTE and Mylan are suffering as subcontractors can’t provide sufficient parts for pickup trucks, mobile phones, and allergy pens. Economies of scale, lean inventories and specialization raise returns to capital – and make companies more vulnerable to disruption.