Did we mention that there is a remake of the economic miracle in Europe going on? Despite tanking car sales, despite daily stories about near bankrupt EU-countries, European manufacturers are in high gear. Did we mention that despite imploding sales at home, Volkswagen delivered 16 percent more units to customers in the first six months of 2010? One would think that might have some bearing on VeeDub’s financials. It sure did. Read More >
The market took note when little Daihatsu announced that its group net profit jumped 460 percent year on year to 19.9 billion yen ($227m) in the April-June quarter of the Japanese fiscal year. Daihatsu is a Toyota company, and the market is eagerly expecting Toyota’s results. Read More >
Toyota Motor Corp. is expected to report a group operating profit of about 100 billion yen ($1.14b) for the April-June period, The Nikkei [sub]. That would be a huge improvement over the same quarter loss of 194.8 billion yen ($2.23b) in 2009. In case you are wondering about the strange quarters: Japan goes by the fiscal year that ends on March 31. The April-June period is the first quarter of the new year, and times are good at TMC. Read More >
Ford Motor Company has announced its second-quarter results for 2010, and the company says it earned $2.6b over the last three months on $2.9b in operating profit before special items. In a departure from the typical model for domestic automakers, Ford’s growth was largely driven by improvement in North American results: Ford earned $1.9b in pre-tax operating profits in North America after boosting its Ford brand to the top spot in the American market over the first six months of 2010. Ford earned $31.3b in Q2 revenue, a $4.5b improvement over Q2 2009 (a $7.4b improvement excluding Volvo). Ford’s operating cash flow improved by $2.6b despite ending the quarter with $21.9b in cash, a $3.4b drop since the end of Q1. However, that drop in cash-on-hand was the result of a $3.8b debt reduction, and Ford figures its total automotive liquidity (including all credit facilities) is $25.4b. Automotive debt was reduced by about $7b, to $27.3b, the result of both the UAW Retiree Medical Benefit trust buydown and a $3b repayment of a revolving credit line. The shutdown of Mercury has reportedly cost Ford about $229m so far, and Ford expects that amount to equal slightly under half of the total cost of eliminating the brand.
Ford’s results aren’t very surprising given the fact that it Ford brand outsold all other brands over the first half of 2010, but the healthy profit shows that a rumored dependence on fleet sales wasn’t enough of a factor to weaken Ford’s financial results. Though debt levels remain high and its overseas performance remains weak, Ford has proven once again that it’s the healthiest American automaker… if only in terms of its North American market performance.
Full financial release in PDF format here, Q2 results presentation slides in PDF format here, Ford Credit results in PDF format here
After months of speculation about GM’s re-entry into the subprime lending market, The General has announced a deal in which it will purchase the lender AmeriCredit for $3.5b. Founded in 1992, and managing assets worth $10b, AmeriCredit has been pursued by GM for the last month, according to GM CFO Chris Liddell in the WSJ [sub]. GM paid AmeriCredit stockholders $24.50 per share for a controlling interest in the firm, a 24 percent premium over its $19.70 closing price yesterday. Still, GM insists that acquiring AmeriCredit will have “a minimal impact” on its balance sheet, although no explanation is given as to how. $3.5b is at least ten percent of GM’s cash pile at this point, and it’s not clear if that qualifies it as a “minimal impact” or if GM is using some kind of financial instrument to purchase the firm. AmeriCredit says it will “expand its offerings” to support GM, likely in the area of lease deals, but it will also continue to offer loans to non-GM-brand car deals.
In most parts of the world, electric vehicles are treated as the second coming of Jesus. Meanwhile in Omaha, Warren Buffett is having doubts whether it was such a good idea to pay $230m for 10 percent of China’s cellphonebattery/car/EV/appliance/house builder BYD.
BYD’s share price has fallen by more than 40 percent over the past three months, China’s First Financial Daily remarks (via Gasgoo.) Can you guess the main reason for the serious drubbing? Read More >
If GM wants to pull off a smashing IPO, they need smashing numbers. There are people they can learn from: Their friends and joint venture partners at China’s SAIC. China’s largest automaker (they have joint ventures with both GM and Volkswagen, can’t get any bigger), said first-half profit may have more than quadrupled from a year earlier, reports Bloomberg. And the secret to their success? Read More >
17 year-old Steven Ortiz is the envy of his friends at Charter Oak High School. The reason? He drives a Porsche Boxster S to school. And before you say it, it doesn’t belong to his parents. It’s legally his. Now I know what you’re thinking at this stage, “How does this punk drive a Porsche to school and I had to make do with a Ford Pinto?” Well, the answer lies with 3 things, an old mobile phone, a little time and Craigslist. Read More >
Bloomberg reports that GM has already pulled off one of the ballsiest IPO moves ever, by asking banks bidding to underwrite its IPO to use fees to subsidize the purchase of GM vehicles by its employees. According to the report, a GM document sent to bidding banks solicited
ideas as to how we can use the IPO to reposition GM and its vehicles within the investment community including your firm’s willingness to reinvest any portion of any underwriting fees into the purchase of GM vehicles for your employees and/or company use.
Wasn’t Ford proud of not having stuffed themselves from the Great American Bailout Buffet? That didn’t stop them from (quietly) asking the Germans for money. And the answer is … Read More >
The European Commission concluded that the sale of Volvo to China’s Geely would not significantly impede competition in Europe (well, that would have been a stretch), and approved the transaction, says Reuters. Read More >
There was a time, in summer of 2007, when a dollar bought more than 120 yen. Once you arrived in Tokyo, you quickly wished it would have bought more. Now, the dollar buys about a third less. The dollar/yen rate had been at a downward trajectory since that summer of 2007. What made the yen really expensive was a company called Lehman Brothers, and the fallout following their bankruptcy in 2008. For inexplicable reasons, the yen is seen as a safer currency than the greenback. Should you make the mistake of stepping off the plane with Euros in your pocket, you would be in for an even bigger shock. In July 2008, a Euro bought 170 yen. Now, it’s down to 109. For even more inexplicable reasons, some mentally unstable people still talk about an undervalued yen.
You may not travel to Tokyo frequently enough to give a hoot. But Japanese auto manufacturers don’t want to take it any more. Read More >
What a week it’s been! Tesla’s stock price is currently sitting just over $16, down from last week’s IPO price of $17. In the meantime, it’s been as high as $29.89 per share. Plenty of analysts figured Tesla’s IPO would be bubble-tastic, but did anyone think the fizz would go out of the EV maker’s stock so soon?
Toyota’s having some pretty rotten luck recently. First was “acceler-gate”, the mass hysteria of how Toyota cars were going out of control and murdering innocent people. Then came stories of people blaming Toyota cars for accidents, when in reality it was the driver’s fault (or in the case of Jim Sikes, a scam). You would have thought this would pour oil over troubled waters for Toyota, right? Nope. The malaise continued. Then came the public humiliation of the senate hearings. Did anybody in the media point out the conflict of interest for the senate? Well, if they did, nobody listened. So, while Toyota is fire fighting in North America and is having a bit of a rough time in Europe, at least things are OK in Australia. A market where Toyota dominated for 5 years. Well… Read More >
Still convinced that the Yen is undervalued? Japanese carmakers beg to differ. They think the Japanese currency became so expensive that it gets cheaper for them to build abroad and to import to Japan. We’ve reported that Nissan is moving the production of their Micra (called March in Asia) to Thailand. When they did this, The Nikkei [sub] saw “huge implications for the future of the Japanese auto industry as a whole.” It certainly looks like Nissan’s exodus to the Land Of Smiles (and occasional riots) started a trend. Read More >
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