Electric car startup GreenTech Automotive, which set up a factory in Horn Lake, Mississippi to manufacturer their low speed neighborhood EV called MyCar, is being investigated by the U.S. Securities and Exchange Commission for the way it solicited foreign investors. GreenTech Automotive was co-founded by Virginia gubernatorial candidate Terry McAuliffe, who is a former chairman of the Democratic National Committee. McAuliffe resigned as chairman of GreenTech in late 2012 when he started his campaign. Read More >
Find News by Subject:
Category: High Finance
Bloomberg and Sky News have reported that the Canadian government has started a selection process to find investment banks for selling off of the stake the government took in General Motors as part of its own contribution to bailing out the automaker. Late last year, Finance Minister Jim Flaherty said that Canada had no intention of holding those shares long-term. Together the federal Canadian and provincial Ontario governments own 140 million shares of common GM stock, valued at $5.1 billion (US), a 10% stake in the automaker, which makes Canada the company’s third biggest shareholder behind the U.S. Treasury and the UAW’s VEBA health plan. The governments had originally invested $9.5 billion in GM back in 2009, selling off 35 million of its shares when GM made its initial public offering of stock in the reorganized company.
Not so fast…again
Though recent reports claim that VW Chairman Ferdinand Piech and Suzuki President Osamu Suzuki are involved in board level talks to resolve the differences in their on again off again relationship, at a news conference for quarterly earnings, Suzuki Executive Vice President Toshihiro Suzuki denied any such talks have taken place. According to Reuters, Suzuki claimed that “There have been various reports, but there absolutely are no such facts, so there is nothing I can talk about on this topic.”
Fuji Heavy Industries, the Subaru’s corporate parent, had a 400% increase in operating profit due to strong U.S. sales for that brand. North American sales for Subaru in its largest market were up 30% to 116,000 unites in the quarter just ended. Fuji’s operating profits were 69.64 billion yen ($739.6 million), up from 17.33 billion yen ($184.05 million) last year, a record for quarterly profits for that company. Read More >
Sergio Marchionne’s plans to merge Chrysler and Fiat have been delayed because Fiat failed to convince a Delaware Chancery Court judge to set the value of Chrysler stock owned by the UAW’s health care fund known as VEBA. Judge Donald Parsons rejected Fiat’s request to find that a call-option agreement covering at least 54,000 Chrysler shares valued the stock at slightly less than $140 million. That decision means that the dispute over the shares’ value will now proceed to trial. Read More >
Chrysler Group reported net income of $507 million in the second quarter, with strong sales of SUVs and pickup trucks helping the car company make a profit for the eighth consecutive quarter. Earnings were up 16% from the same period a year earlier when $436 million was made. However, the company reduced its projected full year profit. Second-quarter revenues grew 7 percent to $18 billion, up from $16.8 billion in 2012.
Europe’s second biggest automaker, PSA Peugeot Citroen, has gotten approval from the European Union for the French government to guarantee $9.28 billion (7 billion Euros) in bonds to provide Banque PSA Finance, the car maker’s finance arm, with funds so they can sell cars on credit at competitive interest rates.
As part of an announced technical partnership between AMG, the performance subsidiary of Mercedes-Benz and Britain’s Aston Martin, Daimler will buy up to a 5% interest in the luxury performance car maker. The agreement will give AM “significant access” to the technical resources of both AMG and its parent. Aston Martin will use those resources to develop V8 engines and have access to Mercedes Benz’s electronic architecture and components. Read More >
Once the merger he plans for Fiat and Chrysler goes through, Sergio Marchionne says that Fiat-Chrysler could be registered as a corporation in the Netherlands, not Italy or the United States. Marchionne wants to have the combined company’s primary stock listing on the New York Stock Exchange and rules for corporate governance in the Netherlands are similar to those in the States.
Final assembly at Lotus’ Hethel plant
DRB-HICOM, which owns the Proton car company in Malaysia and Lotus in the UK, announced at the Jakarta launch of the Proton Preve that the British specialist sports car maker and engineering firm has been “cleaned up” and is proceeding with a three year product plan based on variants of the Elise, Exige and Evora cars, starting with the £52,900 Exige S roadster.
Ally Financial, what used to be known as the General Motors Acceptance Corporation, GMAC, before GM’s bankruptcy and bailout, itself received over $17 billion from the U.S. Treasury during the bailouts of 2009. On Tuesday the company said that it was looking into options on how to repay that money and comply with the Federal Reserves’ latest stress tests for financial institutions. Ally is 74% owned by Treasury and it is trying to buy back some taxpayer-owned stock and reach an agreement with the Fed on its capital structure (known as the “Comprehensive Capital Analysis and Review”) so it can offer stock in an IPO. Ally had originally planned on a 2011 IPO but having to resolve claims against its bankrupt Residential Capital mortgage unit delayed that. ResCap hopes to be out of bankruptcy by 2014. Read More >
Over at Autobytel, Juan Barnett (better known as DC AutoGeek) takes a look at the history of auto financing, originally intended as a way for the common man to be able to afford an automobile some 90 years ago. The most striking thing is how attitudes have changed so dramatically over time.
Initially, bankers were calling for a ban on financing of personal automobiles, fearing that it would lead to financial imprudence. How times have changed.
In a 2008 letter to the Security and Exchange Commission, a collection of automotive finance companies argued against a proposed federal rule that would have made 60 months the maximum term for an automotive loan. The group said “[that the] 72 month term has become the industry standard,” and that it was critical to the American economy to allow banks to determine independently the risk as it relates to automotive loans. They argued that any mandated term limit would cripple the automotive industry. They were probably right.
The Detroit Free Press paints a pretty clear picture of the automotive lending landscape: auto loan terms are rising, with 1 in 5 loans now lasting longer than 6 years. At the same time, the average credit score for those taking out loans is dropping. Ominous signs for a car market that’s running on the hype of a perpetually increasing SAAR, right? Well, not according to some.
Bad news on the subprime front, as credit rating agency Experian reports a rise in delinquencies and repossessions for auto loans in Q1 2013.
Melinda Zabritski offered a rather dubious explanation for the nearly 17 percent rise in repos (as well as the 1.3 percent uptick in 30 day delinquencies and 12.4 percent rise in 60-day delinquencies) Read More >
Recent Comments