Fiat’s UK-style revival plan faces Italian hurdles

Fiat’s UK-style revival plan faces Italian hurdles.

With Fiat’s global volume around 4 million, and Alpha selling about 125 thousand average over past decade, am I missing something?  So you fix Apha an get it back above 200 thousand annual production, if everything goes well.  Not sure how this improves Fiat brand position with the balance of 3.5 – 4 million incremental cars.

Someone needs to communicate what this Alpha led revival is meant to be.  Sooner or later, we need to get beyond the “deal.”

Advertisements

2012 US SAAR – Strong year, decent behavior, I was wrong

Early in 2012 I went out on a limb with a low-ball forecast for the US market of 13.5 million, I was way low.  2012 sales hit 14,49 million, 1 million higher than I saw coming.  Great news for automakers and particularly dealers — maybe some tough news for buyers looking for a deal.

Main underestimation:

  • Easier access to credit with all major OEM’s reaching back into sub-prime.
  • Increased consumer confidence with a steady increase in SAAR rate including a strong push at year-end.
  • Continued deals as GM and Ford fought to keep the volume if not the market share they gained in 2011 when the Japanese were hamstrung. Continue reading

Euro Auto Capacity Reduction: a snapshot and thoughts

Ford’s announcement today that the company will cut it’s Euro capacity by 15% or 350,000 units shows that Alan Mulally has shown the same courage he used to save Ford from the US auto bailout to his Euro operations.  Rather than prolonging the agony of Euro restructuring like so many other players, Ford has taken a decisive step.

Despite almost two years of bluster from continental players, no other make has closed more than one plant.  Even PSA, in its dire straights  Continue reading

Europe outlook: worry about 2013 not 2012

After spending the past 2 days talking with auto execs and investors in NY, it struck me as odd that the question of the day was “What’s your full year Europe outlook?” The real question is, what’s in store for 2013 in Europe.  It’s clear that the industry is in sync with a market down 6% for 2012, with more conservative companies looking closer to the 9-10% drop.

Clearly the drop is fueled by the Latin collapse in Italy, Spain and France and given July and August  — where France turned in a weak -11% performance — I think a negative 6-8% will remain the outlook, even through the Paris Auto Show at the end of this month. The real issue is not 2012.  I am hearing more and more concerns over continuing decline in Continue reading

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

Don’t cry for $ergio.

I couldn’t let this one pass by.  Ford’s Alan Mulally may take home $58.3 million and Chrysler won’t “pay” Sergio Marchionne a salary for the year.  But, don’t forget, Chrysler is just a division (per se) of Fiat, and he’s holding millions of shares in Fiat, and getting more every year.

At least this year, the company didn’t have to cover product losses like his 2007 incident with a quarter million dollar plus Ferrari 599 GTB — I think it was a RENAULT that cut him off — LOL, just a little humor with all these big pay numbers.

Enough said.  Now what about that Chrysler IPO that was imminent in 2011, no, I mean 2012, or was that 2013.  WHAT, no longer imminent?  Oh, well.

Comment: I know this is not significant to share price, but let’s be serious when discussing executive compensation.  They both deserve millions, Mulally for saving Ford preemptively and Marchionne for mastering the financial engineering to keep Fiat and Chrysler alive.  Don’t like it, don’t buy the stock.  Don’t own the stock, you shouldn’t give two hoots.  For a good summary of auto exec comp, if you care, a hat-tip here as usual to Automotive News

 

UPDATE:  Evidently “nothing” can mean: $19 million from Fiat last year.  Oh well.  I am sure the coverage of his payout (WELL DESERVED AND TRANSPARENTLY GIVEN) won’t garner the press of the “no pay“.

Euro car plants in the cross-hairs

Reports today of GM taking a 7% stake in PSA aren’t bad news in the long-term. GM has a great reputation for petrol engine development, and needs to focus its products in Eur. PSA has great product and top class diesel, but lacks scale. But the real sticking point remains: Too much capacity in Europe! Any credible PSA/GM plan would need:

  • Aulnay — already fully expected that PSA will announce the closure post April election in France.Rumors of this closing have drawn virulent protest for the past year or more.  If not, I am suspect on PSA “recovery”
  • Ellesmere Port (UK), the UK government has drawn a line in the sand to keep GM’s two plants open.  British politicians and labor successfully lobbied to stay open during GM’s tumultuous 2009 restructuring of Opel, and are already mobilizing.
  • Bochum (North Rhine-Westphalia, Germany): This one is not so easy. The German auto market has been strong, and the German public has been pushed far in recent months with labor gearing up again to pressure politicians in the

Continue reading