Roads & Transportation

China’s Didi looks short on engine power

23 April 2020

The ride-hailing giant unveiled a three-year plan. Hard-to-compare targets and more of the same bets hardly inspire, especially as tech peers Alibaba and Meituan grab Covid-19 opportunities in health and more. Didi’s $53 bln valuation is vulnerable without a stronger drive.

Virus hands Elon Musk electrifying cost challenge

2 April 2020

Tesla’s boss has ironed out most of its production snafus and amassed enough cash for the carmaker to go almost a year without revenue before running out of juice, longer than Ford or GM. But Musk can only pull that off if he has finally mastered how to keep costs under control.

Beijing helps gas guzzlers at clean cars’ expense

2 April 2020

The government might ease electric vehicle production quotas and delay raising emissions standards. It will ease some pressure on battered conventional auto giants, which generate jobs for millions. But it’s more bad news for struggling new energy startups like Nio.

Mitsubishi is too mild a mediator for Nissan

27 March 2020

Mitsubishi Corp, second-largest shareholder in the eponymous carmaker, is mulling a 10% stake in Renault, Reuters reports. It’s a small step, but could signal an overdue adjustment within the troubled troika. The French group will have to give more to get Nissan on board.

Cheap gas drives auto industry to distraction

19 March 2020

With crude oil futures near $26 a barrel, drivers might lose enthusiasm for electric vehicles if governments put support on hold and let pump prices free-fall. But the push away from hydrocarbons is about more than petrol costs. Carmakers are ill-advised to let investment slide.

Alstom’s M&A detour has lower chance of derailment

17 February 2020

The French train maker is paying $6.7 bln for Bombardier’s locomotive unit, after its preferred deal with Siemens was blocked. Bulking up can counter the threat of China’s CRRC. Success hinges on punchy synergies and a green light from the sticky antitrust signal box in Brussels.

Atlantia charts tentative path to road truce

24 January 2020

The $19 bln infrastructure group’s new boss wants outsiders to invest into its units. These include embattled motorway operator ASPI, which risks losing a rich road concession after a bridge collapse. Opening ASPI’s capital to state investors offers a way out of the crisis.

Alstom-Bombardier rail M&A would face faulty track

22 January 2020

The $11 bln French train maker and its Canadian rival are discussing a deal, Bloomberg reported. The former’s failed deal with Siemens posed more obvious EU antitrust issues, but Brussels may still balk. And synergies that rely on big job cuts in France will be politically toxic.

Siemens CEO’s climate blog sends semi-woke signal

13 January 2020

Joe Kaeser has admitted the 98 bln euro German engineer should not be working on Australia’s Adani coal mine, but cannot pull out. Creating a panel to vet deals for their greenness, and possibly nix them, is partial penance. The CEO’s public disapproval may be a better deterrent.

New York entertains a lesson in secession

10 January 2020

Staten Island may reanimate a 26-year-old bid to break away from the Big Apple. There are countless reasons not to, and the economic case is sketchy – but residents could back it anyway. New York’s “forgotten borough” is a fitting ambassador for a world that’s getting smaller.

Benettons play risky game of chicken in road row

10 January 2020

Motorway operator Atlantia, part-owned by the Italian dynasty, is haggling with the government over toll fees following a 2018 bridge collapse. Betting that the fragile executive won’t cancel its concession could backfire. Besides, the $20 bln group can afford Rome’s demands.

Battered Japan automakers look better under bonnet

13 November 2019

From Subaru and Suzuki to Mazda and Mitsubishi, local marques have been hit by a strong yen and soft demand. Though things are bad, fundamentals seem firm and government stimulus may help. Japanese carmakers look clunky, but they are ready to switch up a gear.

Renault M&A would help stem profit bleed

18 October 2019

The $15 bln French carmaker expects 2019 operating profit to plunge as growth slows and R&D expenses rise. While it can do little about a sluggish economy, which may see sales decline by 4%, combining with Nissan or Fiat would mitigate the cost of investing in cleaner engines.

Tata should make a U-turn on Jaguar Land Rover

9 October 2019

The Indian carmaker has clung to the marques since buying them for $2.3 bln in 2008. As auto sales plummet, though, Tata would be smarter to focus on its home market without the cash-burning JLR distraction. It also could pocket a tidy sum as a seller in a consolidating industry.

New Nissan CEO will make Renault’s life easier

8 October 2019

Makoto Uchida’s first job is to cut costs and get the $24 bln carmaker growing again. Resolving tensions with partner and 43% shareholder Renault is next on the to-do list. A history of working on alliance projects suggests he’ll favour closer cooperation than rivals for the job.

Volkswagen’s damaged CEO remains roadworthy

24 September 2019

Herbert Diess has presided over a share price fall, made a Nazi joke, and may now face a criminal charge of market manipulation. Assuming he survives the latter, his recent truck IPO and focus on electric vehicles are right. Oddly, the $85 bln group would be weaker without him.

Green fears could keep UK high-speed rail on track

23 August 2019

The so-called HS2 link from London to northern England may end up 29 billion pounds over budget. That eats into benefits of the bullet train’s potential to narrow Britain’s troubling north-south divide. Yet concerns about global warming point to the project maintaining momentum.

Brookfield on slow train to infrastructure payback

1 July 2019

The investor and Singapore’s GIC are buying U.S. railroad group Genesee & Wyoming for about $6.4 bln. The return on total investment works out under 5%, partly reflecting the scarcity of transport assets. Brookfield at least has the portfolio and experience to squeeze out more.

Fiat-Renault M&A collapse creates losers all round

6 June 2019

The Italian-American carmaker withdrew a merger offer after the French state sought to delay a decision. The companies lose 5 bln euros of synergies, while Renault and Nissan remain stuck in a frayed alliance. Paris has flubbed an opportunity to show its pro-business credentials.

Fiat’s French appeasement game is means to an end

3 June 2019

Chairman John Elkann is mulling concessions to get the French state to greenlight the $35 bln Renault merger. A board seat for Paris and some cash shouldn’t risk planned cost savings, or Nissan’s assent. It’s a small price to pay for first-mover advantage in car consolidation.