AA roadside repair prolongs debt hazard 21 Feb 2018 The UK breakdown group’s shares lost of a fifth of their value after its new CEO warned of lower earnings and slashed the dividend. A costly push to sign up younger members is necessary but risky. Pulling it off is the only way to shrink the company’s 2.7 bln pound debt load.
Old activist needs to rent new strategy for Avis 16 Feb 2018 Hedge fund SRS is waging a proxy fight for three seats on the car-rental company’s board. Avis is a ripe target, having struggled with price pressures and missed targets. But an eight-year investor with two directors in place already isn’t the most persuasive agent of change.
French state is handbrake on Renault’s valuation 16 Feb 2018 Despite revenue rising 15 pct last year and a cost-saving alliance with Japan’s Nissan, the carmaker trades at a discount to rivals. Selling more cars and boosting margins will help, but the French government’s 15 pct stake is the main obstacle to CEO Carlos Ghosn boosting value.
Uber’s Waymo deal recasts existential question 9 Feb 2018 The ride-hailing service is paying Alphabet’s self-driving unit $245 mln in equity, ending a legal fight over trade secrets. Uber says it didn’t use its rival’s know-how. But if driverless cars are its only road to profitability, it needs to be a technology leader, not a laggard.
Nissan’s partners can help it shift to higher gear 8 Feb 2018 The $42 bln Japanese automaker's operating profit tanked, as it discounted cars in America and a domestic inspection scandal took its toll. That will keep its laggard valuation stuck in neutral. Nissan's challenge is to make the most of its alliances with Renault and Mitsubishi.
Elon Musk fiddles while Tesla burns 7 Feb 2018 The entrepreneur bagged some good PR for his other firms by putting a Roadster into space and selling flamethrowers. He also broadened Tesla’s funding mix with a securitization. But with some $4 bln of cash set for incineration this year, the carmaker needs to sell more stock.
Auto 2.0 race is becoming General Motors’ to lose 6 Feb 2018 Cost cuts and SUV and truck sales are boosting earnings. CEO Mary Barra has also pulled out of troubled markets. That leaves the automaker well positioned to lead mass production of electric and self-driving vehicles – as long as Barra can leave behind its accident-prone past.
Ola puts SoftBank in back seat with overseas drive 5 Feb 2018 The Indian ride-hailing outfit wants a slice of the action in Australia. The intrusion into one of Uber’s strongholds will irk SoftBank, which is a big investor in both firms. The Japanese group’s minority stakes clearly are not enough to stop fights between taxi startups.
Daimler drives into profitability problem 1 Feb 2018 The Mercedes-Benz owner expects operating profit to be flat in 2018 despite a rise in sales and margins last year. The cost of developing electric cars justifies European auto groups' lowly valuations. Financial engineering tricks like spinoffs can only be a short-term fix.
Hadas: Tesla’s $60 billion mistake on pay 31 Jan 2018 The loss-making electric-car maker could hand founding genius Elon Musk that much if all goes miraculously well. The hero-worship approach to compensation made some sense when Tesla was more concept than manufacturer. What it needs now is more boring and bureaucratic competence.
Auto industry exposes NAFTA’s blind spot 29 Jan 2018 Canadian negotiators have pointed out that the North American treaty doesn’t capture the value of high-tech equipment in autos, Reuters reported. A rule change to reflect tech advances is due. Complex supply chains call for new ways of measuring trade flows.
Fiat Chrysler powers ahead in carmaker wacky races 25 Jan 2018 Its shares are the industry's best performer of the past year, and its multiple leaves sleeker rivals for dust. Yet earnings are only so-so. Investors may be expecting a sale, or only clocking short-term results. It's a tricky lead for CEO Sergio Marchionne's successor to defend.
Tesla board drives CEO pay into electric dreamland 23 Jan 2018 Elon Musk will make nearly $60 bln if he hits new targets by 2028, on top of the $100 bln-plus value boost for his existing stake. Musk is critical to Tesla, and he blew through his last goals years early. The new ones are even more ambitious. But incentives can lose meaning.
Viewsroom: Donald Trump goes to Davos 19 Jan 2018 The U.S. president heads to the Swiss Alps confab that’s the antithesis of his “America First” ideology. He’ll have competition: keynote speaker Narendra Modi, with his “Make in India” policy. Plus: BlackRock’s Larry Fink pushes social activism. And why Ford is stalling.
China’s battery champion will charge overseas 19 Jan 2018 A $2 billion IPO would give CATL a richer valuation than rivals such as Samsung SDI. To justify that price, the battery maker must thrive at home and abroad. Cracking global supply chains is hard. But where other Chinese giants have stumbled overseas, CATL might just succeed.
Ford stock’s staying power makes no sense 17 Jan 2018 The Motown automaker expects costs and currencies to impede its earnings recovery. It also trails GM on autonomous cars and is having to double its electric-vehicle investments. Yet Ford trades at a higher multiple than its Michigan rival. GM's prospects look brighter.
Uber’s next ride-share could be in Southeast Asia 17 Jan 2018 After struggling in China and Russia, the app operator swapped its businesses there for stakes in Didi and Yandex. Another sensible partner would be $6 bln-plus Grab, which shares a backer in SoftBank. As Uber aims for an IPO, it's a good region in which to cut further losses.
Shareholders leave Autos 2.0 on the hard shoulder 15 Jan 2018 Ford is more than doubling its electric-battery investment to $11 bln, and GM is pushing its driverless car. But as industry gathers for its annual Detroit confab, investors still seem to doubt carmakers can turn new technology into dollars. Tesla remains the exception.
Car lenders’ real risk is fines, not writedowns 15 Jan 2018 The rapid growth of UK auto finance has led to a glut of shiny new motors and twitchy regulators. Banks and carmakers can absorb a hefty drop in used-car prices. The bigger hazard is that lenders may cut corners to keep the market ticking over and end up paying conduct fines.
GKN breakup defence is still on drawing board 12 Jan 2018 The UK engineer grappling with an accounting scandal rejected a $9.5 bln offer from serial acquirer Melrose. Its alternative plan of splitting itself in two makes sense and could deliver more value. But investors need more proof it can fix its business, and a clearer timetable.