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.
U.S. government GM sale is more noise than motion 19 Dec 2012 The Detroit automaker’s bosses will be glad to lose the “Government Motors” moniker in a year or so – not to mention restrictions on their pay. But industry-wide worries, not Uncle Sam’s stake, are weighing on the stock. Treasury could have waited rather than take a $5 bln loss.
Goldman gets reward for taking year-end block risk 13 Dec 2012 Renault’s sale of its 6.5 pct stake in Volvo is a boon for the French carmaker. But it was hazardous for Goldman, which stood to wear as much as 1.5 bln euros in selling the block. Any loss would hurt just as the books are about to close for 2012. The upside? League-table credit.
Bond in driving seat in Aston Martin investment 7 Dec 2012 Its high-yield bond, that is. A $240 mln injection from Investindustrial should boost research and growth at 007’s favourite carmaker and spare some of its Kuwaiti owners’ blushes. But creditors are the immediate winners. After a rough ride, the bonds have roared back towards par.
Aston Martin’s Casino Royale is a long way off 29 Nov 2012 Life’s hard for niche automakers, even if James Bond’s a fan. Supercar demand has wilted. Starved of funds, vehicles can grow as stale as Brosnan-era 007. A potential $400 mln injection from a new investor would boost Aston Martin. Just don’t expect decent returns any time soon.
Fiat Industrial unearths more value in CNH tie-up 20 Nov 2012 The Italian tractor maker’s no-premium merger bid for 88 pct-owned unit CNH was rightly rebuffed by a committee of the U.S. company’s board. FI is back with a 26 pct cash bump. The bidder’s not above some arm-twisting too. But this looks more like a fair squeeze-out premium.
Europe’s automakers given bad steer by France 14 Nov 2012 Insistence by Paris that Peugeot protect jobs in return for a bailout has understandably given GM jitters about a closer alliance. Europe’s car industry won’t be solidly profitable until capacity and costs are cut through mergers. Governments should help, not hinder, the process.
Tesla’s risky vision puts Detroit to shame 13 Nov 2012 Elon Musk’s electric carmaker is racking up awards for its new sedan. The Model S has speed, looks and gadgets - not just batteries - to best gas-guzzling rivals. That’s better than Motown or Japanese makers managed. Tesla’s challenge is turning all that into consistent profit.
VW relaunches mandatory convertible market 6 Nov 2012 The German carmaker’s 2.5 bln euro issue is the biggest for a while. The deal immediately alleviates pressure on its credit rating, and is less costly than placing shares today. Other issuers with comparable equity stories may follow.
GM’s ex-lender closer to repaying U.S. – on paper 5 Nov 2012 GM and Ally owe taxpayers $42 bln. GM is profitable but trades way below break-even. Ally’s combination of a solid core business, asset sales and reduced mortgage risk values it above what it owes. But only an outright sale would recoup taxpayer aid fast. That looks remote.
Ford gives rope to budding boss Mark Fields 1 Nov 2012 Alan Mulally isn’t ceding his CEO title, but he is handing most of his operational responsibilities to the automaker’s North America head. Fields, who steered Ford’s biggest region back to profit, will be COO. Come Mulally’s exit, now set for 2014, the top job will be his to lose.
Ford’s Q3 power puts Europe woes in perspective 30 Oct 2012 The automaker’s North American unit had its best showing in at least 12 years. With core operations consistently profitable, CEO Alan Mulally has more than enough breathing room to fix the ailing European business. Even if that takes time, Ford still looks undervalued.