It’s safe to buy Ford again. Ford as in the F share. After trading at close to $15 in April, it could be had below $10 yesterday. A bargain. Or so it seems. Read More >

So Tesla lost $30m last quarter. Do you know who made $20m in profits on Tesla in one day? Read More >

Will the North American market for cars go up 45 percent in the next four years? I’m not convinced. Certainly the momentum hasn’t shown up yet. But this slide is from GM’s “Global Business Conference” which the company is holding in Michigan this week to drum up support for its forthcoming IPO. So… a little over-optimism is hardly surprising. But we’re not the only ones skeptical of GM’s ability to take flight as a public company. Automotive News [sub] reports that

Mirko Mikelic, a fixed income portfolio manager at Fifth Third Bank in Grand Rapids, Michigan, said he expected GM to face grilling about the risks of a return to recession in the United States.

“There’s concern about a double dip out there. That’s probably the biggest thing that’s weighing over GM coming to the market because that’s going to keep (auto sales) down for another year or two,” he said.

Check out the complete presentation in PDF format here, and decide for yourself if The General is worth an investment. The slides after the jump are certainly more convincing…

Read More >

Far be it from us to tell you to take Jim Cramer’s word as gospel… but he does seem to have Tesla’s IPO figured out. And now that the stock is public (NASDAQ: TSLA), he wants you to run away screaming. We find it difficult to disagree… but feel free to keep an eye on the stock yourself.

A source tells Reuters [UPDATE: Tesla confirms in press release] that Tesla has

sold 13.3 million shares for $17 each, raising about $226 million. It raised the number of shares it hoped to sell by 20 percent. It had planned to sell 11.1 million shares for $14 to $16 each.

That’s more than the “as much as $213m” number floated earlier, but with a recent Toyota deal and an EV-infrastructure bill in congress, Tesla has as much wind at its back as it can ask for. But if investors do get to start trading Tesla stock starting tomorrow, they’ll have a gut check before long. Tesla lost $30m last quarter, and it the second quarter ends on Wednesday. If those numbers show another healthy loss, investors will look away knowing that they’re in a risky, long-term investment. But can a $1.6b market-cap firm really compete in development, design and manufacturing with the giants of the automotive world simply by taking in two times its 2009 revenue in one IPO?

Read More >

As much as it pains me to admit it, Ford is a company to be admired. When bailouts were handed around like doobies in the Summer of Love, they didn’t partake (argue that point amongst yourselves, but you know what I mean). Their cars are interesting (to say the least) and their reliability is now being thought of in the same vein as Toyota, Honda and Hyundai. All of this is down to one man, Mr Alan “I bet you wish to made me CEO now! Eh, Boeing?!” Mulally. He put forward a vision of Ford divisions and subsidiaries working together to create a global product. He pared down the extraneous brands. He put the axe to Mercury and he didn’t need a bankruptcy to do it. In short, Mr Mulally has done well at Ford. The question is how well? Read More >

Every day, German auto managers go on their knees and pray that the financial troubles in Greece, Spain and elsewhere continue. Why? The troubles keep the Euro low, and a low Euro is high octane fuel for German car exports. In May, German car exports rose 46 percent. For the first five months, German car exports are up 50 percent. Despite a lackluster home market, the German car industry is hitting on all cylinders: For the first five months, German production is up 26 percent to 2.3m units, driven mostly be strong demand from China and the U.S. However, red flags are going up. Literally. Read More >

American Audiphiles can rest assured that their future four-ringed purchases will be Made in Germany and not somewhere in what is sometimes euphemistically called “North America.” Plans to build an Audi plant over here have been put on ice for an indefinite period. Worries about a tainted Aryan Audi race (in the motorsports connotation, of course) can be put aside. “We don’t need an American plant to reach our goal of 1.5m Audis a year by 2015,” said Audi Boss Rupert Stadler to Automobilwoche [sub]. “We could build a car in the U.S. in six months,” said Stadler, referring to the VW plant in Chattanooga. “Building a plant somewhere in the boonies would take three years.” And what’s the real reason? Read More >

Throughout the debate on Wall Street reform, I have urged members of the Senate to fight the efforts of special interests and their lobbyists to weaken consumer protections.  An amendment that the Senate will soon consider would do exactly that, undermining strong consumer protections with a special loophole for auto dealer-lenders.  This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise.  This amendment guts provisions that empower consumers with clear information that allows them to make the financial decisions that work best for them and simply encourages misleading sales tactics that hurt American consumers. Unfortunately, countless families – particularly military families – have been the target of these deceptive practices.

This is what president Obama said just six weeks ago about efforts to exclude car dealership financing from consumer protection measures included in the forthcoming Financial Reform bill. With that bill moving towards Obama’s desk, all that stands in the way of its passage are angry dealers who don’t want to be subject to oversight. And despite the tough talk about standing up to financial interests to pass this reform, it seems Obama has caved to America’s auto dealers.

Read More >

The WSJ [sub] reports that GM is officially looking outside of its former captive finance arm Ally Financial (formerly GMAC) as it seeks more subprime loan deals to drive sales volume ahead of its IPO. GM execs tell the WSJ that The General could do even better with an in-house finance arm, but that these deals will help. And, according to Experian Automotive’s Melinda Zabritski, GM needs the help because

By not financing [subprime] consumers, they are locking out about 40% of the U.S. population

GM’s restructuring consultants AlixPartners add that loyalty improves for customers who buy using a captive lender. The downsides? Higher default risks, the temptation to overload on incentives, and then there’s one more biggy…
Read More >

The Detroit News reports that GM will file paperwork to register its initial public offering as soon as next week, citing anonymous sources. This registration will be our first look at exactly what GM and its masters at the Treasury Department are trying to achieve with the offering. Analysts are predicting that the government will sell only one-third of its 61 percent stake in GM, which would rid it of an absolute majority stake but would preserve its status as the largest GM stakeholder. The Canadian and Ontario governments, the UAW’s VEBA fund and bondholders in Motors Liquidation may sell parts of their stakes as well, but there are still no estimates as to just how much of GM’s equity will be up for grabs in this offering. Or what the market response will be. And with the car market still shaky, Opel demanding more of GM’s cash, IPOs being canceled right and left, and only one profitable quarter under GM’s belt, voices are already starting to wonder if GM isn’t rushing this offering for political reasons.

It stands to reason that Japanese car makers would rejoice over rising wages in competing China and over an appreciating Chinese currency. Rising wages make production there more expensive, a rising Yuan makes exports more expensive. Both should give the Japanese more breathing room. That reasoning is falling by the wayside. The Nikkei [sub] reports that these developments pose ”serious threats to Toyota’s profitability in China, strategic challenges that other Japanese companies must also deal with.” Just goes to show that you need to be careful what you wish for. And wait who else should worry. Read More >

Oh, one other thing, I think its maybe helpful to say what has been my track record in value creation – these are four of the companies Ive been associated with – its worth noting that every financing round in every company has been an up round, doesn’t matter if the market has gone up or the market has gone down, the squiggly line is the market, and the valuations are as you can see somewhat market independent, and I expect that to be the same for Tesla, or to continue to be the same with Tesla

Tesla CEO Elon Musk, in his IPO presentation [via Darryl Siry]. This, apparently, is the answer to the question how does a company that’s sold just over 1,000 cars think it’s going to become an industry player?

Good to know.

In the first nine months of the current fiscal year Porsche sold slighty fewer cars than in the same period of the previous year. But they made more money: They are looking at operating profits of €0.6b  on sales of €5.2b. That’s a double digit operating profit, ladies and gentlemen, and none of the put and call hanky-panky is included. Now what do you think is the catalyst for the wunderbar numbers? Are you sitting down? Read More >

When Volkswagen CFO Hans Dieter Poetsch was asked to make some forward looking statements on April 29, he was reasonably confident that Veedub could improve sales and operating profit from the 2009 level, “but that’s it.” Now suddenly, Volkswagen throw caution to the wind and says that  the company would “significantly” exceed last year’s results when 2010 is over, says Reuters. That assessment, made by a usually very cautious company, is bolstered by a forecast-beating performance in the first five months. Read More >