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PlanMaestro Newbie

PlanMaestro

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Read more: http://www.autonews.com/article/20130114/BLOG06/130119920#ixzz2HydU0g7o

 

Chrysler showed a brief video about "passion," had Jeep CEO Mike Manley give short introductions and then drove the SUVs onto the stage. Manley had a bit of a swagger as he noted that Jeep set a global sales record in 2012 and "regained its rightful place as the number-one SUV brand in America."

 

But it just doesn't feel like a real Chrysler reveal unless there's an hour or two of cleanup required afterward.

 

Of course, even a run-of-the-mill press conference marks a big step up from where Chrysler was a few years ago. Its stand in 2009 was so cheaply done that a large metal Pentastar logo fell from the ceiling, nearly taking out a journalist below, and it had no formal event at all the following year, because it had nothing new to talk up.

 

Chrysler's new strategy looks to be showing off by not showing off.

 

 

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muscleman Newbie

muscleman

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Do you know if EXOR guarantees any of the subsidiary's debt? I couldn't find that info anywhere.

EXOR's Fiat industrial's value is about twice that of Fiat. So if we want to long EXOR, we need to make sure Fiat industrial also look good, right?

Its trailing P/E seems to be around 14, which is not too expensive, but not cheap. There should be some further growth driven by higher Corn and Rice prices all over the world, but do you think this one's potential is as good as Fiat? Maybe this one's a 2 begger, but Fiat's a 8 begger?

So if we take a weighted average on this, it will be about 4 begger? That is not bad at all assuming all of the other EXOR subs are worth zero.

Additional, do you think EXOR is created to benefit shareholders, or it is more like something to enrich the Agnelli family?

 

1. Does Exor guarantee any subsidiary debt? I have not found anything in their financial statements indicating that they do. However you might want to ask yourself how they would react if a liquidity issue were to occur. I would consider it probable that Exor would be forced to inject cash if such an event were to take place. I recommend that you read note 27 of the 2011 Annual Report as it covers details on Exor and subsidiary debt (http://www.exor.com/uploads/552033-EXOR%20Annual%20Report%202011%20completo%2030%20maggio.pdf).

 

2. Regarding Fiat Industrial. There is not the same upside potential to FI than F but there is also less uncertainty around FI. After the merger with CNH a NewCo will be created, with a more simpler structure and likely a lower cost of capital. There are is also a tax rationale for the merger. I would not expect FI to be a 2xbagger over a short term though...

Here is an equity research by Goldman Sachs: http://www.borsaitaliana.it/documenti/studi.htm?filename=92348.pdf

Updates can be found here: http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc&page=2

 

3. Is Exor created for the benefit of the shareholders? Exor was created out of IFI and IFIL in a 2008 reorg. Giovanni Agnelli & Co (representing the Agnelli family) owns more than 50% of Exor and John Elkann is in control of Giovanni Agnelli & Co as he holds majority voting power within GA&Co. I recommend watching his discussion on Exor at the Family Business Network (

). One thing Exor does is provide more liquidity and a more efficient pricing (as opposed to IFI and IFIL) for those Agnelli family members who would want to sell shares, so in that sense it is created for the benefit of shareholders. But as in other owner operator companies, nothing will happen without the approval of the one in control so you either trust them or you don´t. They are trying to simplify the capital structures of Exor and subs, so that should bring more clarity for all shareholders and could be viewed as positive.

 

Thank you!

Fiat industrial's upside is much lower than that of Fiat, though there is less risk. Overall, the idea that taking a long in EXOR only gets me 1/3 of exposure to Fiat and 2/3 of exposure to Fiat industrial disturbs me a bit.

 

You're welcome.

 

For your consideration: Exor is more than 1/3 Fiat and 2/3 Fiat Industrial, but if you add SGS and Cushman & Wakefield these four will account for about 80% of the assets. Exor also carries debt, so there is a leverage effect from that, has more cash (+equivalents) then it needs and is trading well under book value.

 

Yes. Those other subs are hard to understand, and they don't seem to report a decent profit, so I would like to be conservative and assign value 0 to them.

I wish I could understand SGS and C&W better. :)

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muscleman Newbie

muscleman

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Marchionne says Dart's slow start due to transmission availability

Sales of the 2013 Dodge Dart have been slow because the car didn't launch with the transmission it should have, Chrysler-Fiat CEO Sergio Marchionne said this morning. Speaking to journalists at the Detroit auto show, Marchionne said Dart sales were hampered because only manual transmissions were available at first, with a six-speed automatic sourced from Hyundai serving as a stopgap until a promised nine-speed automatic is available.

 

PS: Muscleman, I don't like much to talk about my portfolio or returns.  Each one has to make his own decisions. This is one reason I am not blogging as much, too much wasted time talking about what and when instead of why and how. There is a lot of info here.

 

Thank you Plan. Nice to see you here.

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txlaw Newbie

txlaw

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http://www.reuters.com/article/2013/01/14/us-autoshow-fiat-alfa-idUSBRE90D16J20130114

 

He's frank, but his word choice is a bit odd . . .

 

Gotta get that Italian capacity utilized, I guess.

 

Do you know how long will the Alfa delay to be?

I hope not too bad. :)

 

No idea. 

 

Yeah, it looks like a pretty sweet car.

 

Actually, I've been really impressed with all these cars that have been coming out recently -- it's like design is back.

 

Scion FRS/Subaru BRZ

Cadillac ELR

New Corvette Stingray

Alfa Romeo 4C

Tesla Model S and Model X

 

Any more that people are impressed with?

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Sportgamma Newbie

Sportgamma

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Fiat pegs Chrysler as most undervalued carmaker

http://blogs.reuters.com/breakingviews/2013/01/14/fiat-pegs-chrysler-as-most-undervalued-carmaker/

 

Marchionne to narrow Fiat European loss as market hits bottom

http://www.autonews.com/article/20130114/ANE/301149730#ixzz2I19PLpU2

 

From Fiat pegs Chrysler as most undervalued carmaker

 

The Fiat boss says the offer follows from the agreement struck with the UAW trust in 2009 when the U.S. government divvied up ownership after bailing Chrysler out. Fiat took control, now owns 58.5 percent, and wants to fully integrate its American subsidiary. Marchionne’s price, though, assumes the deal contained a clerical error pegging any acquisitions from the trust to Chrysler’s performance. He says that should have referred instead to Fiat which, like other European automakers, is suffering.

 

The trust, which owns the other 41.5 percent of the carmaker, has rejected the offer and asked Fiat to prepare to sell up to 16.6 percent of Chrysler on the open market. If that’s a ploy to establish a higher valuation, it should work. Marchionne’s offer values Chrysler at just four times his own expectation of the company’s 2012 net income. General Motors, meanwhile trades above nine times expected earnings for last year, and Ford’s multiple is just over 10 times.

 

How would this hold up in court?

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PlanMaestro Newbie

PlanMaestro

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Chrysler CEO Sees Big Rise in Pick-Up Sales

http://www.4-traders.com/FIAT-SPA-69342/news/Chrysler-CEO-Sees-Big-Rise-in-Pick-Up-Sales-15827255/

"It is a business that we expect to grow significantly in 2013 because it is associated with the economic recovery cycle especially in connection with housing in the United States, which we expect to increase substantially over 2012," he told a news conference at the North American International Auto Show.

 

"So just in terms of rough numbers, I would expect the pick-up market on a percentage basis to do better than the passenger car market," he added.

 

Chrysler and other U.S. automakers make more money from the sale of pick-up trucks than they do from passenger cars, so any rise in their sales can help drive profitability.

 

Competition among these automakers is expected to intensify with the arrival of new models, such as the Chevrolet Silverado from General Motors Co (>> General Motors Company).

 

Chrysler, which is majority owned by Italy's Fiat SpA (>> Fiat SpA), has just launched a heavily updated version of its popular RAM 1500, which won the Truck of the Year award at this year's Detroit auto show.

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muscleman Newbie

muscleman

Posted
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Read more: http://www.autonews.com/article/20130114/BLOG06/130119920#ixzz2HydU0g7o

 

Chrysler showed a brief video about "passion," had Jeep CEO Mike Manley give short introductions and then drove the SUVs onto the stage. Manley had a bit of a swagger as he noted that Jeep set a global sales record in 2012 and "regained its rightful place as the number-one SUV brand in America."

 

But it just doesn't feel like a real Chrysler reveal unless there's an hour or two of cleanup required afterward.

 

Of course, even a run-of-the-mill press conference marks a big step up from where Chrysler was a few years ago. Its stand in 2009 was so cheaply done that a large metal Pentastar logo fell from the ceiling, nearly taking out a journalist below, and it had no formal event at all the following year, because it had nothing new to talk up.

 

Chrysler's new strategy looks to be showing off by not showing off.

 

 

Plan, I agree that Chrysler's future will be very bright.

Regarding the Fiat vs VEBA fight, in the worst case scenario, Fiat has the option to buy all of VEBA's shares for $5.5 bn, and Fiat has $20 bn cash, so even if it cannot negotiate a stunning bargain, it is not too bad to buy those shares at $5.5 bn, is it? Chrysler will be a big cash cow after the release of the new dodge Ram.

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muscleman Newbie

muscleman

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so even if it cannot negotiate a stunning bargain, it is not too bad to buy those shares at $5.5 bn, is it? Chrysler will be a big cash cow after the release of the new dodge Ram.

 

Agree.

 

I tried to find any formal documents regarding the call option. I don't want to hear from news reporters. This is the only one I find, but it does not say exactly what the price is for the call option. That is so weird.

http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex992.htm

 

 

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muscleman Newbie

muscleman

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Is India a reliable place to R&D cars?

I heard some jokes before that after Tata acquired Land Rover, it sent out its best engineers to UK to learn the technology. In the end they couldn't understand the technology.

I also heard 2 years ago that Tata motor's world's cheapest new car (less than $3000) had serious reliability problems and they had to stop production for it.

 

I hope Fiat is aware of that, and has a different way of quality control.

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txlaw Newbie

txlaw

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Is India a reliable place to R&D cars?

I heard some jokes before that after Tata acquired Land Rover, it sent out its best engineers to UK to learn the technology. In the end they couldn't understand the technology.

I also heard 2 years ago that Tata motor's world's cheapest new car (less than $3000) had serious reliability problems and they had to stop production for it.

 

I hope Fiat is aware of that, and has a different way of quality control.

 

Wikipedia:

 

The automotive sector is prominent in Pune. It is home to the Automotive Research Association of India, which is responsible for the homologation of all vehicles available in India. All sectors of the automotive industry are represented, from two-wheelers and autorickshaws to cars, tractors, tempos, excavators and trucks. Automotive companies like Tata Motors, Mahindra & Mahindra, Mercedes Benz, Force Motors (Firodia-Group), Kinetic Motors have set ups in Pune. Automotive companies including General Motors, Volkswagen, and Fiat have set up greenfield facilities near Pune, leading The Independent to cite Pune as India's "Motor City".[44] Several automotive component manufacturers like Saint-Gobain Sekurit, TATA Autocomp Systems Limited, Robert Bosch GmbH, ZF Friedrichshafen AG, Visteon, and Continental Corporation are located here.

 

Can't speak to the jokes about Tata.

 

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