Tech drive strips old-school carmakers of clout

By Breakingviews Columnists
March 2, 2015

Apple is the latest to take an interest. From Tesla to Google, the shift to connected, self-driving vehicles may take a while, but it could shake up everything from systems to materials to car usage. The winners may be able to rev up returns far higher than current performance.

Rob Cox: It took the Grim Reaper to restructure GM

January 14, 2015

The carmaker’s swift bankruptcy sparked less soul-searching than the process of determining who died from faulty ignitions. Bringing Ken Feinberg in will go down as CEO Mary Barra’s smartest decision. She should go a step further and memorialize the dead in the lobby of GM’s HQ.

Tech steering carmakers down valuation dead end

January 12, 2015

As the Detroit auto show kicks off, manufacturers from Toyota to Ford to VW are getting little, if any, credit for profit growth. Recalls, currencies and geopolitics are all to blame. Longer term, they’ll feel the squeeze from connected vehicles. Low multiples may be here to stay.

Mary Barra gets a second first year at GM’s wheel

December 24, 2014

The carmaker’s ignition-switch fiasco crashed her debut as CEO. The crisis may, though, have speeded up much-needed changes. Barra needs to show these will stick. She also has to prove the Motown firm is prepared for what may be some of the biggest changes the industry has faced.

More Porsche than Prada: Why Ferrari’s worth $7bln

December 11, 2014

Fiat will float the iconic sports car brand in 2015 and wants investors to see it as a luxury goods company rather than a carmaker. That’s a stretch. Building Ferraris takes more capital and R&D than handbags and shoes. Margins - and multiples - are lower for a reason.

German carmakers tune up the basics of banking

November 5, 2014

The in-house operations of VW, Daimler and BMW are all solidly profitable. They follow some basic rules that rivals and bigger institutions often forget. Lend to people who can repay, expand carefully and find secure and cheap funding. Successful owners also help.

Capital crisis making Italy SpA stronger

July 10, 2014

Italian capitalism is undergoing Darwinian selection. Companies can no longer rely on the state, age-old shareholder pacts or even Mediobanca for capital. Firms are being forced to adapt to the rules of global finance to avoid extinction. The next generation looks fit to prosper.

GM can find small comfort in Toyota’s ride

April 1, 2014

The U.S. automaker recalled more cars and doubled the estimated cost for the first quarter ahead of boss Mary Barra’s Capitol Hill grilling. Even so, Toyota’s recent fiasco suggests the financial fallout should be manageable. GM’s culture will be harder to repair.

BMW profit miss just a bump on safe road

November 5, 2013

Shares of the German carmaker dropped 4 percent after its quarterly earnings disappointed. Investors should be more relaxed. BMW’s profit is dented by heavy investments in new cars and technologies. And the company’s future prospects still look better than its competitors’.

Porsche performance disguises VW’s weak spots

October 30, 2013

Europe’s largest carmaker is far from firing on all cylinders. Volkswagen lifted operating profit by a fifth in the third quarter with Porsche doing especially well. But its mass-market brands are slowing and there are nagging doubts about a large-scale revamp of production.