Apollo Tyres’ $2.5 bln takeover is piling up risks 17 Sep 2013 The Indian firm may need an agreement with U.S. unions for its takeover of rival Cooper to proceed. The setback follows months of opposition from workers in China. If the solution raises costs, Apollo will have less room for error when it comes to servicing the deal’s hefty debt.
Memo to Fiat on Chrysler listing: Drop it! 16 Sep 2013 The Italian carmaker’s full takeover of its U.S. subsidiary is delayed by an unnecessary quarrel about its valuation. That may end with a temporary listing of a 16.6 pct stake of Chrysler. There are easier and faster ways to assess the company. Fiat should use them.
Abenomics opens a capital window for Japan Inc. 12 Sep 2013 Sharp and Mitsubishi Motors are weighing share issues to help repair troubled balance sheets. With the weak yen boosting earnings, equity capital market volumes have returned to near pre-Fukushima levels. Though investors remain cautious, other troubled companies may follow.
European autos’ recovery faces investment drag 11 Sep 2013 Bosses at the Frankfurt motor show agree that a slow recovery is coming. The optimism is largely justified. The difficulty is that the uptick in demand coincides with a technological inflexion point. Hefty investment spending is required, and the winners aren’t easy to predict.
Ford’s next CEO needs simple road map 6 Sep 2013 Savior Alan Mulally may stick around into 2014. But whether he quits sooner or later his successor needs to avoid diversions like an M&A spree or too much management change. Be it COO Mark Fields or someone else who takes the driver’s seat, investors expect mostly cruise control.
Tesla’s Elon Musk exudes hints of Steve Jobs 8 Aug 2013 Like Apple’s late chief, the electric carmaker’s CEO crafts an impressive product. Now he’s gaining a reputation for beating earnings estimates, too. One difference: investors never gave Jobs full credit at Apple. Tesla’s valuation, by contrast, may give Musk too much.
BMW showcases beauty of long-term strategies 1 Aug 2013 The German carmaker is revving up R&D and capital investment. Spending 12 pct of revenue hurts short-term earnings, but it has ramped up expenditure before to great effect: it now outperforms its premium-brand rivals. Investors should be as farsighted as BMW’s management.
End in sight for European carmageddon 31 Jul 2013 Decent half-year results at Peugeot suggest even Europe’s weakest carmaker may have passed its darkest hour. Sales are still falling and overcapacities abound, but survival strategies seem to work. Hopefully, the crisis might make Europe’s volume manufacturers stronger.
China index: Drinking, driving through a slowdown 31 Jul 2013 Demand for liquor, Audis and trucks helped take the edge off China’s slowdown in June. Despite Beijing’s curbs, strong home sales played a supporting role in lifting Breakingviews’ Tea Leaf Index. But exports put the brakes on, falling for the first time since January last year.
Strong Daimler results can’t hide China woes 24 Jul 2013 A better-than-expected second quarter shows the premium carmaker has the product life cycle on its side for now, as new models are selling briskly. But Daimler still has not fixed its problems in China, where it is falling further behind. Investors should take note.
Peugeot family may hold key to European autos M&A 27 Jun 2013 Descendants of the French automaker’s founders may give up control for closer ties with General Motors, according to Reuters. Its U.S. partner may balk at a merger. But the family’s recognition that its time is up may help spur much-needed broader industry consolidation.
Tesla obstructionists should be firmly resisted 24 Jun 2013 New York is the latest state where U.S. car sellers want to stop Elon Musk’s company selling directly to customers. The franchised dealership model is antiquated and expensive, as the woes of Detroit’s Big Three showed. Government shouldn’t stand in the way of Tesla’s innovation.
Banking versus car sales: spot the difference 5 Jun 2013 Uncharitably, it could be said both trades are about making as much money as possible as a middleman. Wall Street and City types happen to wear finer threads and earn more lucre. Now ex-Barclays big shot Roger Jenkins is hoping to bridge the gap by snapping up luxury dealerships.
Porsche conviction is a bit better than nothing 5 Jun 2013 The mild criminal judgment against Porsche’s former CFO, for deliberately misrepresenting the carmaker’s financial woes in credit negotiations, shows German legal authorities are making some progress in bringing boardroom criminals to justice. A bigger test is coming soon.
Elon Musk has to sell 540,000 Teslas a year 3 Jun 2013 That’s what a Breakingviews calculator shows may be needed for the electric automaker to be worth $43 bln by 2022, a target in the CEO’s 10-year incentive plan. That and other goals could bag him up to $1.8 bln. The hurdles are high. If Musk does it, he’ll deserve every penny.
Agnellis brace for Fiat-Chrysler merger endgame 3 Jun 2013 The Agnellis want to maintain their 30 percent stake in Fiat after the Italian carmaker has merged with Chrysler. The 2 bln euro sale of their stake in Swiss inspection group SGS gives them ample means to take part in a potential capital hike after the deal.
Germany finds pay balance that’s right for Europe 28 May 2013 The days of excessive German wage restraint are over, as the latest deal at Volkswagen shows. Wages are set to outpace inflation but not productivity. That’s enough to help consumer spending without harming employment. Germany’s European trading partners should cheer.
German carmakers should beef up R&D, not lobbying 27 May 2013 The country’s manufacturers are fighting tougher European emission guidelines. The attack may serve short-term profit but is misguided from a broader perspective. Rather than lobbying for the status quo, the industry should invest more in low-emission mobility.
New model Mercedes is make or break for Daimler 14 May 2013 The German carmaker drives the next version of its flagship Mercedes off the forecourt on May 15. Much depends on the success of the new S class. The luxury sedan might be an amazing car, but shifts in market tastes and sales problems in China may undermine its success.
Tesla shareholders are pulling ahead of themselves 14 May 2013 The award-winning $10 bln electric carmaker is trading at a multiple implying fast growth, high margins and mass-market success. The first is doable, the second harder, and the third a long way off. CEO Elon Musk is doing a fine job. But investors seem to assume he’s infallible.