Roads & Transportation

VW’s shares are priced for EV self-destruction

22 February 2019

Likely cash flows to 2025 almost justify the carmaker’s 75 bln euro market value. Investors either think it’ll be worthless after then, or expect cratering combustion-engine sales and wasted investment in electric vehicles. Economies of scale mean that could be too pessimistic.

Brexit paints go-slower stripe on UK car industry

19 February 2019

Plant closures like Honda’s in Swindon raise the spectre of decline for Britain’s auto sector. Yet the underperforming site always looked vulnerable. The bigger test is whether global carmakers want to build electric vehicles in the UK. Brexit will prove a huge deterrent.

Just Eat could prove a tasty M&A morsel

11 February 2019

The 4.9 bln pound UK food-delivery group is leaderless and faces an activist investor. It could keep investing in its delivery services to fend off Uber, but peers like Takeaway.com and Delivery Hero are doing the same. Just Eat’s cut-price valuation could force the board’s hand.

Scooters will soon find city-friendly sweet spot

19 December 2018

They're tech toys that clog up streets and sidewalks. Yet they are also a clean, low-cost bridge between cars or mass transit and walking. The Bird CEO talks about sharing the cost of infrastructure. That could be a way forward, as long as the business model can stand it.

France can best help Renault by cutting it free

21 November 2018

Finance Minister Bruno Le Maire wants to consolidate the carmaker’s alliance with Nissan, which risks fraying after boss Carlos Ghosn was arrested in Japan. Selling the state’s 15 pct stake in the company is politically hard but would remove a big hurdle to a much-needed merger.

Ferrari boss’s cautious driving has merit

5 November 2018

Investors punished new CEO Louis Camilleri in August for calling his predecessor’s targets "aspirational". Ferrari’s rising EBITDA margin arguably warrants a more stringent target. Yet trade war fears and volatile Chinese regulation mean Camilleri is right to exercise caution.

Mike Manley can put FCA’s war chest to good use

30 October 2018

The auto group’s new boss is handing shareholders 2 bln euros from a car-parts unit sale. That leaves 4 bln euros for Fiat Chrysler to invest, save or do a deal. Propping up its balance sheet would soothe investors and rating agencies, and be a firm sign of conservative intent.

Hadas: Six economic reasons to hate Uber

25 October 2018

Economists are wrong to drool over the car service provider as an exemplar of free markets. This financial zombie has destructive effects on transit, a dysfunctional strategy and an antisocial approach to regulation. Also, it hurts its workers and makes investors look foolish.

Renault deserves its battered valuation

23 October 2018

The French carmaker trades at one of the lowest multiples in an unloved sector. Shrinking third-quarter sales show why that is merited. An alliance with Nissan and electric-vehicle investments offer glimmers of hope, but neither will turbo-charge shares in the coming year.

Volvo fumes are second hazard for truck investors

16 October 2018

The $31 bln Swedish group’s warning on engine emissions could scarcely have come at a worse time. Investors are already fretting that demand for commercial vehicles has peaked for the current cycle. When two truck-dashboard lights are flashing, the safest thing to do is bail.

Activists may soon arrive by truckloads to Germany

9 October 2018

Whether uppity investors will rattle the cages of VW and Daimler depends on how they separate their commercial-vehicles arms. Resorting to standard, crummy German governance through partial listings, rather than clean-break spinoffs, will earn them the enmity of investors.

TomTom is risky option on carmakers beating Google

27 September 2018

The $2 bln navigation group may sell a sideline business a week after key customer Renault said it would use Google Maps. After the sale, TomTom would look cheap – unless the search giant wipes the floor with rival mapmakers. The U.S. group’s track record makes that a dicey bet.

Market dominance defends China’s Didi from murder

29 August 2018

The $56 bln ride-hailing app is in big trouble after a driver killed a female passenger. With #MeToo gaining traction in China and an IPO in the pipe, the timing is terrible. Didi’s near-monopoly protects it from a shutdown, but tighter regulation could punish profitability.

Gig economy throws wrench into China labour policy

28 August 2018

App-based jobs are becoming controversial in the People's Republic, too. Factory strikes may be waning, but reports of worker protests involving startups like Meituan and Didi are rising. That's leaving Beijing stuck between two priorities: social stability and tech innovation.

Geely’s cruise-control ride is coming to an end

22 August 2018

Volvo's Chinese sister cranked out another solid set of results, with profit up 54 pct to nearly $1 bln. Margins expanded and its domestic market share grew. At nine times expected earnings, Geely fetches a premium to global peers. It’ll have to raise its EV game to justify it.

Vulnerable Toyota enjoys a moment in the sun

3 August 2018

Japan's largest automaker earned nearly $6 bln last quarter, a 7 pct bump. That’s a relief after Nissan, where a drop in U.S. sales weighed. Still, executives are right to strike a cautious tone while Trump's trade guns remain aimed at Tokyo: Toyota is less protected than rivals.

Ferrari proves it can run mostly on autopilot

1 August 2018

New CEO Louis Camilleri inherits a firm in fine shape from Sergio Marchionne. While FCA cut guidance after its ex-boss’s death, Ferrari posted strong results, even if it qualified its outlook as “aspirational”. The Italian supercar maker looks nonetheless poised to motor ahead.

Peugeot’s Opel repair job looks halfway complete

24 July 2018

CEO Carlos Tavares has restored Opel to profitability, just a year after buying it from GM. A 5 pct operating margin makes his long-term targets credible, at the risk of giving hostile unions a stronger hand. Still, Tavares’ cost cuts vindicate Peugeot’s premium valuation.

Toyota plots yet another jittery ride-hail route

13 June 2018

The Japanese carmaker is investing $1 bln into Asian startup Grab. It’s the latest in a slew of deals that mostly reflect manufacturer fears about where things are headed in autonomous driving and beyond. As GM’s fading Lyft alliance shows, though, the path is far from clear.

CEO exit takes Samsonite rebuttal only so far

1 June 2018

The $5 bln luggage-maker parted ways with its boss after a short-seller revealed he didn’t hold a doctorate despite sometimes being called “Dr”. Samsonite’s efforts to knock down other accounting and governance allegations could take longer after it lost the benefit of the doubt.