China first half auto sales: still on two tracks

China auto sales are in for the first half and they are slightly ahead of the consensus of 5% growth for the year.  Overall PV sales are up 7.1% over last year, and again we see a two-tiered level of performance.

First-half growth was driven largely by a rebound on the Japanese brands after their hit from last year’s earthquake impact, and a push from luxury brands 2012 actions to move overbuilt inventory.  Overall GM + the Japanese brands lead the increase while locals were relatively flat.  June sales were extremely strong +16%, I see this as mainly driven against the constricted J3 sales post earthquake in 2011.

The Japanese brands drove market growth with newly stocked inventory.  June sales were extremely strong for Honda in particular, up 84%.  Nissan and Toyota had more regular supply last year leading to results more in line with YTD numbers.

However, all international brands are not the same Continue reading

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CNH+Fiat Industrial: 1+1= 2 at best

Finally, Sergio Marchionne has pulled the trigger on fully merging CNH and Fiat Industrial, and pretty much in line with expectations. The proposal made to the BOD at CNH (which Marchionne is Chairman of) from FI (which Marchionne is chairman of) is for a merger of the two companies at “undisturbed” pricing” answer the only real question for investors: Is there any downside for CNH shareholders?  It turns out not really.

The inverse question was more important: Is there any upside?  Not really here either, and that may be a disappointment for some investors who speculated Continue reading