Jaguar far from becoming China’s next top model 22 Mar 2012 The luxury carmaker owned by India’s Tata will join Mercedes and BMW in producing in China. It’s smart to get a local badge, since things are likely to get tougher for foreign auto firms. But the regulatory road is long, and low-end carmaker Chery is a curious choice of partner.
Fiat CEO’s call for EU auto fix is barmy 7 Mar 2012 Sergio Marchionne says Brussels must take a lead in eliminating the industry’s excess capacity, by spreading needed cuts in production across the continent. But that’s not the EU’s job. Its remit is to ensure sound competition – which should help the sector take care of itself.
Peugeot’s $1.3 bln cash call inspires confidence 6 Mar 2012 Underwriters sought a 32 pct discount to the theoretical ex-rights price for the carmarker’s fundraising in its alliance with GM. That seems steep, but reflects a challenged industry. Indeed, for a company raising a third of its market value, the 6 pct share price drop is muted.
U.S. natural gas looks irresistibly cheap vs oil 5 Mar 2012 With crude prices rising and gas sliding further, oil is now eight times dearer than gas based on energy content - the biggest gap since the 1950s. Global shifts dictate the price of the black stuff but, as news from Detroit shows, local market forces should work on American gas.
GM needs better ideas for Opel than Peugeot deal 28 Feb 2012 Europe suffers from overcapacity in cars. It’s not at all clear how spending $325 mln for a minority stake in its struggling French rival changes that dynamic, particularly given GM’s history. The deal only makes sense as a precursor to gut-wrenching consolidation.
"Buy China" auto drive not just protectionism 28 Feb 2012 Excluding foreign brands from new government orders looks unfair. But domestic overproduction, and the image of privileged Audi-driving officials, have created a political dilemma. When growth slows, concerns at home can seem more important than keeping trade partners happy.
GM tie-up could keep Peugeot family at the wheel 22 Feb 2012 The French carmaker had to do something after burning through 1.5 bln euros of cash in six months. It needs greater scale to take on Volkswagen. Fiat was a potential partner. But a non-equity tie-up with GM is a way to let the Peugeot family to keep control.
Would President Romney sell Uncle Sam’s GM stake? 16 Feb 2012 Sure, governments should try not to hold stakes in private firms. But selling now, as Political Romney just proposed, would cost taxpayers $14 bln. That’s a hit Private Equity Romney would surely avoid. As long as D.C. leaves GM alone, it’s smarter to wait for a better price.
Carmakers show Indian manufacturers can compete 31 Jan 2012 So far, India’s economic growth has looked more to services than manufacturing. But balance is needed and carmakers may provide a blueprint. With low barriers to foreign capital, India is set to become the third largest car maker in the world and could become a major exporter.
Ford’s profit fender-bender not as bad as it looks 27 Jan 2012 Falling a fifth short of Wall Street’s Q4 estimates dinged the automaker’s shares. But Ford’s balance sheet and product line-up are strong. And there are more cost cuts coming. Even allowing for the challenges its overseas operations face, Ford’s stock should be shiny again soon.
China’s car surplus should worry global giants 13 Jan 2012 Auto sales by volume grew at the slowest pace in 10 years in 2011. Gridlocks and pollution limit demand potential at home. But ambitious manufacturers are unlikely to down tools. Soon Western carmakers may have to deal with keener and stronger Chinese exporters.
Detroit faces first real post-crisis test in 2012 10 Jan 2012 The Big Three U.S. carmakers can now make money on fewer sales and are revving up a variety of decent products. But they’ve also benefited from rivals’ woes, not least the Japan earthquake. The playing field looks more level than it has in years. That’ll expose any shortcomings.
Fiat may find Chrysler deal is ticket out of Italy 5 Jan 2012 The Turin carmaker will spend 2012 working out how to acquire the rest of the Detroit firm after raising its stake to 58.5 pct. Depending on the structure, Fiat may become Italy’s first truly global multinational - but only if the Agnelli family puts pragmatism over sentimentality.
Ford’s bold dividend revival looks defensible 8 Dec 2011 The automaker is reinstating a payout after a five-year hiatus despite its junk-bond rating, Europe’s debt woes and U.S. economic wobbles. The $760 mln a year represents less than 10 pct of profits. That should be manageable even in a downturn and reinforces Ford’s pole position.
How GM’s Akerson can show off some Mulally mojo 1 Dec 2011 Bankruptcy gifted GM a better balance sheet and CEO Dan Akerson is revving up sales. But he still needs to fix Opel, further overhaul operations and truly bury the stodgy old GM before he can convince investors he’s capable of the turnaround Ford’s Alan Mulally has achieved.
Tata keeps things in the family 23 Nov 2011 Cyrus Mistry’s appointment as Ratan Tata’s successor continues the habit of dynastic succession in Indian companies. That may not be such a bad thing. But Mistry can promote outside talent by stepping back from the chairmanships of Tata Steel and Tata Motors.
Old ghosts still haunt new GM 9 Nov 2011 The Chevrolet centennial is reason to celebrate tradition. And GM’s Q3 profit reflects well on the recent past - its quickie bankruptcy. But the automaker is still cutting costs, has big unfunded liabilities and a gloomy end-of-year outlook. History may still be holding GM back.
Japan Inc’s earnings problems are home grown 7 Nov 2011 Honda, Panasonic and Sony all reported grim quarterly earnings. Weak global demand, a strong yen and natural disasters are partly to blame. But they underscore deeper problems caused by domestic policies and Japanese exporters’ long-standing neglect of profit margins.
Neutral is best gear for U.S. automakers’ cash 26 Oct 2011 Ford’s ninth quarterly profit in a row has investors wondering about a dividend. GM’s cash pile has raised hopes it might buy back the U.S. Treasury’s holdings. But growth is sluggish and Europe’s still a profit hole. Keeping balance sheets strong is the better option for now.
Tata’s Jaguar Land Rover journey needs direction 29 Sep 2011 Tata Motors is in no rush to replace its CEO, who stepped down on Sept. 9. It is not the only gap at India’s largest auto maker. Shares in the firm, which also owns Jaguar and Land Rover, trade at a big discount to peers. A new CEO might find value with more business integration.