Fiat will find out if it pays to be different 3 May 2013 The Italian carmaker is trying to swim against the dismal tide in the European market. While struggling peers are closing down plants, Fiat adamantly refuses to reduce production capacity. The risky strategy relies on Chrysler’s strength. So far it seems to be working.
Chrysler value spat may offer Fiat silver lining 29 Apr 2013 The Italian automaker and a union trust are $3 bln apart on the value of the 41.5 pct of the Motown manufacturer Fiat doesn’t already own. Yet the outcome – full integration – isn’t in doubt. In the end, an urgent need to raise equity may hasten Fiat’s move from Italy to America.
Return to glory days may elude Japan’s automakers 24 Apr 2013 The falling yen will boost earnings and market share. But compared to 2006, Japan ships fewer cars abroad, margins are narrower, and U.S. rivals are no longer in a mess. Toyota’s market value is unlikely to overtake that of its eight main western competitors combined again.
Toyota-isation of banking brings reputational risk 19 Apr 2013 Forget financial models derived from quantum physics. The solution to low returns in banking may be found in the car industry of 30 years ago. A production-line revolution replacing people with machines could drive profit in a low-growth world. But society may suffer for it.
BMW, VW and Daimler: similar and unequal 15 Apr 2013 The leading German carmakers have ignored the most severe crisis of the European auto market in decades. After record results, they reckon they can cope with a worsening environment. Yet there are differences between them - which markets only partly appreciate.
Washington risks becoming new subprime promoter 3 Apr 2013 The White House wants banks to provide riskier taxpayer-backed mortgages. Fed policy has helped boost the number of borrowers with poor credit getting auto loans. It’s no 2007. But it smacks of policymakers ignoring potential bubbles to boost growth. That’s a losing proposition.
U.S. auto sales put brakes on economy’s detractors 3 Apr 2013 Americans are buying more cars. Cheap loans and pent-up demand are factors. But so is the housing recovery. That and other economic data suggest consumers are looking beyond slimmer paychecks. Federal spending cuts allowing, that means the U.S. engine may be about to purr.
VW’s mega-profit hides risky governance weak spot 14 Mar 2013 The carmaker’s 25 bln euros of pre-tax earnings are the highest ever for a listed German company. Despite a dismal European car market, current prospects are bright. But in the long term, politically charged and family-dominated governance is a source of vulnerability.
GM’s recovery starts showing some cracks 14 Feb 2013 The automaker reported $900 mln of Q4 profit - pretty decent considering losses in Europe. But unlike at Ford, results in the U.S. disappointed, and GM paid more incentives to buyers. The company is no lemon, but CEO Dan Akerson needs to show the last quarter of 2012 was a blip.
Record losses aren’t the end of sad Peugeot story 13 Feb 2013 Investors seemed to take the French carmaker’s 5 bln euro record loss in their stride. The group exceeded its cost reduction goals and pointed to huge cash buffers. But its plan still depends on the optimistic view that the car market will stabilise at last.
Peugeot’s writedown shocker isn’t end of trouble 8 Feb 2013 The struggling French carmaker is slashing the book value of its plants by more than 4 bln euros. This is partly due to new accounting guidelines, but the company’s outlook remains bleak. If its turnaround doesn’t materialise, the family group may soon need a bailout.
Daimler should shelve simplistic size ambitions 7 Feb 2013 The Mercedes brand owner wants to overtake BMW and Audi as the world’s premium carmaker. While the company must avoid dropping further behind, it is silly to want simply to be the biggest. It threatens profitability, and 2012 financial results show that is already a problem.
Chrysler’s bumper 2012 confirms Fiat’s stinginess 30 Jan 2013 The Detroit automaker beat its own profit forecast by 13 pct and should do even better this year. Chrysler has its problems. But it could now be worth up to $12 billion. That’s double the Italian majority owner’s recent offer for a small slug of a union trust’s 41.5 pct holding.
Ford needs non-U.S. units to step up a gear or two 29 Jan 2013 The automaker’s home market is carrying the company. Granted, problems in Europe - which lost $1.8 bln in 2012 - are being addressed, South America’s woes are containable and revenue in Asia is growing. But Ford could use solid profit elsewhere to balance America’s resurgence.
GM and Ford could be set to turbo-charge 28 Jan 2013 The two U.S. automakers are admirably cautious about this year’s prospects. An improving domestic economy could, however, accelerate pent-up demand among subprime borrowers and especially pickup truck buyers. That would give a lift to margins at GM and Ford - and their stocks.
Renault job cuts test France’s industry fetishism 16 Jan 2013 The French carmaker is to shed 14 pct of staff in its home market in one of the worst slumps in decades. Workers that keep their jobs face pay cuts. Pressure on costs will be pervasive. This will hurt in a country that remains fixated on industry as a symbol of economic might.
Fiat pegs Chrysler as most undervalued carmaker 14 Jan 2013 CEO Sergio Marchionne’s latest offer to buy a stake in Chrysler from the UAW trust sets the U.S. manufacturer’s worth at $6 bln. True, it lacks the cash and margins of Ford or GM. But it’s a purer play on a recovering U.S. market. Fiat can safely value Chrysler more generously.
Porsche’s real legal crash test is yet to come 9 Jan 2013 Porsche investors may think the legal risks stemming from its takeover bid for Volkswagen are subsiding. This would be a delusion. The carmaker may be off the hook in the U.S., but it will be haunted in the next few years by lawsuits in Germany that are not bound to fail.
Wall St could learn a thing or two from Detroit 3 Jan 2013 Both needed government aid in 2008. But it is the automakers that have restructured and become decently profitable in straitened times. Detroit’s Big Three still have work to do, but they have responded better. Motown’s chiefs can more easily justify big pay days too.
Avis gives Zipcar a faster lane to profitability 2 Jan 2013 Selling to the mainstream car rental giant for $500 mln means a 32 pct loss for those who bought Zipcar’s shares in its 2011 IPO. But tapping into Avis’s underused fleet should boost the car-sharing company’s margins. And for Avis owners, cost savings justify the 49 pct premium.