Roads & Transportation

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.

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.

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.

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

17 Feb 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 Jan 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 Jan 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 Jan 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 Jan 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 Jan 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 Nov 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 Oct 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 Oct 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 Oct 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 Sep 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 Aug 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 Jul 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 Jun 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 Jun 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.

Renault-Fiat merger savings matter more than price

31 May 2019

The French carmaker’s board may feel a proposal by its Italian-American rival takes advantage of a depressed share price. The bigger prize, though, is synergies worth 50% of combined operating profit. If those are credible, Renault should not quibble too much about valuation.

Greyhound sale is first leg of owner’s long trip

30 May 2019

Under pressure from an activist, Britain’s FirstGroup is selling the iconic U.S. coach group and spinning off its UK bus unit. Simplifying the $1.8 bln group should unlock value. But uncertainty over timing and liabilities means investors are miles away from their destination.