Autos

Icahn’s Volkswagen-Navistar deal is DOA

8 Apr 2020

The activist was finally set to make a fat return on the U.S. truck maker thanks to the German carmaker’s $2.9 bln offer. But the deal was never signed, and the target’s shares have halved. Given CEO Herbert Diess may have to take state aid, another Icahn bet may bite the dust.

Three deals that can measure India’s pulling power

6 Apr 2020

Mukesh Ambani’s Reliance Industries and the Tata group want partners for businesses from oil and chemicals to consumer tech and cars. The success of stake sales by the country’s A-list will be a key measure of India’s attractiveness to foreign investors in a post-virus world.

Virus hands Elon Musk electrifying cost challenge

2 Apr 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.

Germany is in the fast lane for an auto bailout

2 Apr 2020

EU auto manufacturers are shutting factories and furloughing workers. Current liquidity buffers can keep them going on average for around five months, assuming sales evaporate. If a virus-induced lockdown drags on, Volkswagen and Daimler could be the first to face a cash crunch.

Corona Capital: Uncle Sam’s penchant for boutiques

2 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. The U.S. government has given a boost to independent investment banks by hiring Moelis. Perella Weinberg and PJT are its bailout advisers. Megabanks like JPMorgan and Goldman Sachs, meanwhile, are left on the shelf.

Beijing helps gas guzzlers at clean cars’ expense

2 Apr 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.

Corona Capital: GE, Oaktree, M&A back doors

1 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. GE delivers its own form of cash injection, hedge fund boss Howard Marks praises heavy-handed Covid-19 responses, and a car-parts maker flirts with bailing on a deal.

Corona Capital: Banking bonuses, Local TV M&A

30 Mar 2020

Concise views on the pandemic’s corporate and financial fallout: BBVA’s ditched bonuses pressure peers; local TV deal has more than one struggle.

Ford, GM can ride out lockdown till September

27 Mar 2020

The two U.S. automakers are bringing in almost no revenue with factories and sales on hiatus. And they have huge fixed costs. But they’re awash with cash and don’t need to buy parts. Throw in some austerity, and each has around six months before no or slow sales threaten a crash.

Mitsubishi is too mild a mediator for Nissan

27 Mar 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.

Corona Capital: Bailout fees, Distressed junk

25 Mar 2020

Concise views on the pandemic’s corporate and financial fallout: Wall Street brushes off its bailout pitchbooks. And high-yield debt suggests a deluge of defaults.

Cheap gas drives auto industry to distraction

19 Mar 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.

Continental recovery will remain stuck in low gear

5 Mar 2020

The 17 bln euro German auto supplier cut its annual dividend by 16% after operating profit fell sharply. A plan to slash 500 million euros of costs by 2023 will do little to ease shareholder pain. Lower car demand and high spending on new software mean 2020 could well be worse.

GM’s electric plan gives Musk a fresh challenge

4 Mar 2020

Boss Mary Barra unveiled an industry-leading 400-mile-range battery and $20 bln to invest in new tech by 2025. Sure, her estimated electric car sales will only have GM crawling towards its “zero emissions” goal. But it poses a more serious threat to Elon Musk’s Tesla.

Robo-taxis’ earnings horsepower

3 Mar 2020

General Motors reckons autonomous cabs can be a $1 trln market in the United States alone. That requires some heady assumptions about how cheap running such a service can be, and how many people can be persuaded to ditch car ownership for robo-rides.

Robo-taxi payday is a marathon self-drive away

3 Mar 2020

The prospect of mass adoption of autonomous cars has won Alphabet unit Waymo outside investors, helped boost Tesla’s stock and has GM positing a $5 trln global market. Robo-taxis could be big money-spinners. But aligning tech, costs, regulation and user readiness will take years.

Virus only strengthens Peugeot merger logic

26 Feb 2020

The $17 bln French automaker warned of lower sales growth and margins. The effect of the coronavirus will be a further blow. Still, combining with Fiat Chrysler should lead to a more profitable and resilient group. Investors aren’t giving boss Carlos Tavares enough credit for it.

Nio’s $1.4 bln lifeline may pave a smoother road

26 Feb 2020

The cash-strapped U.S.-listed Chinese electric-car maker is close to securing funding from a municipal government in Anhui. Similar past agreements have failed to materialise but this one, with official ties, is a more promising immediate and longer-term pillar of support.

Renault stuck tinkering with clunky Nissan tie-up

14 Feb 2020

The Japanese car giant disappointed again, logging its first quarterly loss since 2009 and cutting its profit forecast by 43% as the coronavirus hit sales and suppliers. With a merger shelved for now, recent tweaks to an alliance with Renault will need to pay quick dividends.

Tesla $2 bln stock sale puts Musk faithful to test

13 Feb 2020

The electric-car maker is selling shares two weeks after the CEO said it wouldn’t make sense to do so. With the stock sky high, it's sensible opportunism. But the CEO’s flip-flopping, and Tesla’s skimping on investment to turn a profit, ought to make investors more skeptical.