LC Posted January 11, 2016 Author Share Posted January 11, 2016 jeeze, great remarks from Sergio. Link to comment Share on other sites More sharing options...
merkhet Posted January 11, 2016 Share Posted January 11, 2016 jeeze, great remarks from Sergio. I'm not sure there's any CEO that I like more than Sergio right now. Link to comment Share on other sites More sharing options...
whatdadil9 Posted January 11, 2016 Share Posted January 11, 2016 His comments privately are so much more constructive than his public image.... I think the public persona looks desperate and disclaims that the auto industry sucks. I struggle to see how this thing gets re-valued or valued at all unless he/others convinces people publicly that they will take part in the automobile revolution to electric and self driving cars... Link to comment Share on other sites More sharing options...
goldfinger Posted January 11, 2016 Share Posted January 11, 2016 His comments privately are so much more constructive than his public image.... I think the public persona looks desperate and disclaims that the auto industry sucks. I struggle to see how this thing gets re-valued or valued at all unless he/others convinces people publicly that they will take part in the automobile revolution to electric and self driving cars... FCAU Shareholders do not need valuation multiples to increase, just to be in line with current industry valuation multiples (which are mediocre at best). Also some news on financial targets here: http://www.4-traders.com/FIAT-CHRYSLER-AUTOMOBILES-18206341/news/Fiat-Chrysler-CEO-says-major-shift-on-way-for-North-American-plants-21673768/ "He also said that Fiat Chrysler will make its financial targets of zero industrial debt and operating profit of 9 billion euros by 2018. He said that he will stay at his post running Fiat Chrysler through 2018 and the end of the current five-year plan for the company. He said that several Fiat Chrysler executives are in positions that put them "in training" to be his successor." Link to comment Share on other sites More sharing options...
goldfinger Posted January 11, 2016 Share Posted January 11, 2016 Another one which a bit of meat: http://finance.yahoo.com/news/fiat-chrysler-ceo-says-2015-140802695.html?soc_src=mediacontentstory&soc_trk=tw Sergio at his best: " Asked by reporters whether he confirmed a goal to sell around 7 million cars in 2018, Marchionne said he confirmed the financial targets of the 2014-2018 plan and that it did not matter how many cars the company was selling to reach those targets." Link to comment Share on other sites More sharing options...
goldfinger Posted January 11, 2016 Share Posted January 11, 2016 Negativity around FCAU is well illustrated in this article: http://www.bloomberg.com/news/articles/2016-01-11/marchionne-embarks-on-final-mission-impossible-at-fiat-chrysler Even if the group massively underperforms its targets (Sergio usually beats his own targets) and reaches what analysts are forecasting (most are bearish) - the valuation still looks quite depressed: http://screencast.com/t/PrNgm2wK56t 10B$ market cap for 3.5B$ earnings (and low net debt)? Link to comment Share on other sites More sharing options...
SwimmingNaked Posted January 11, 2016 Share Posted January 11, 2016 I struggle to see how this thing gets re-valued or valued at all unless he/others convinces people publicly that they will take part in the automobile revolution to electric and self driving cars... I'm glad Sergio is not buying into the hype. He had great comments about this in the press conference today (haven't watched the whole thing but caught the last 15 minutes). Incompetent management teams (like GM) are buying into the hype and not realizing the end game is a standardized solution which makes a lot of the spending in the "race to autonomy" wasteful. The OEMs are also competing with more capable firms like Google in developing this technology, which makes no sense because a company like Google is doing a lot of the R+D work for you and will likely end up becoming a supplier, meaning your competitors will end up with the same technology while deploying less capital. The auto OEM business is not one that confers sustainable benefits on the company that is first to market with a new technology, because that technology gets standardized and replicated by all the other OEMs. The end result of this standardization is that differences in technology across different brands become indistinguishable to the consumer, i.e. the consumer expects the feature to be relatively consistent across all new cars. So all the OEMs are headed to the same place, the ones with smarter management teams will get there while deploying less capital. This is the luxury of having a CEO who truly understands the value and importance of allocating capital judiciously over one that puts half a billion into a second tier app company. A foolish company and its money are easily parted. On electric cars, Sergio has mentioned that "there is nothing Elon/Tesla is doing right now that we can't do", presumably they are not doing the same thing because electric cars are a money losing venture at this point in time. And again...technology eventually gets standardized in this industry. After the new CAFE standards, electric/hybrid investments make much more sense but right now I can't think of a better way to piss away money than aggressively developing EVs. Link to comment Share on other sites More sharing options...
whatdadil9 Posted January 11, 2016 Share Posted January 11, 2016 Swimming- all fair points. But why doesnt he say that on the public microphone? No one listens to these press conferences. They listen to analyst calls, mad money, cnbc, etc... Like when the CEO of AN came on tv and sent all the stocks down 10+ % Economics will change over time but perhaps over time for the better. Instead, he says the industry doesnt earn its cost of capital and needs consolidation to survive. I think the messaging needs to be much more clear about the OEM's seat at the table, what the economics look like, etc. or we will be trading like OUTR, Blockbuster, etc. What muliple do you put on an intensely cyclical biz that consumes tons of capital where you dont understand the future of the economics....? Link to comment Share on other sites More sharing options...
DCG Posted January 11, 2016 Share Posted January 11, 2016 Are you guys holding onto RACE shares? Not sure what to do here with this spinoff. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 11, 2016 Share Posted January 11, 2016 Are you guys holding onto RACE shares? Not sure what to do here with this spinoff. I am. I was looking to sell if it stayed in the high-50s to low-60s, but since it fell 20% before I ever received the shares in my accounts I think I'm holding onto it. The valuation at $60ish was rich, but not necessarily absurd. A valuation in the 40s is much more reasonable and I'm less likely to let it go at that price unless if I need the cash for better opportunities. Link to comment Share on other sites More sharing options...
DCG Posted January 11, 2016 Share Posted January 11, 2016 Is it worth moving that cash back into FCAU though instead? I don't have a great understanding of the Ferrari side of the business, other than that the shares seem overpriced to me based on comparing the valuation to FCAU. Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted January 12, 2016 Share Posted January 12, 2016 Sergio's remarks at the 2016 NAIAS: Part 1: Part 2: Part 3: Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 12, 2016 Share Posted January 12, 2016 Is it worth moving that cash back into FCAU though instead? I don't have a great understanding of the Ferrari side of the business, other than that the shares seem overpriced to me based on comparing the valuation to FCAU. I think it's likely that FCAU shares are better value here, but it's an uncertainty because it requires execution of their plan over the next few years to make it so. Ferrari also has execution risk if you're banking on them selling more cars at higher margins in an economic slowdown, but at $40 it seems reasonable value for the company and isn't as compelling as it was to switch when it first IPOd. If Ferrari's shares stabilize while FCAU's continue falling, I'd rethink my position. Link to comment Share on other sites More sharing options...
karthikpm Posted January 12, 2016 Share Posted January 12, 2016 http://www.bloombergview.com/articles/2016-01-05/fiat-s-brilliant-spinoff-of-ferrari?cmpid=yhoo.headline Wonder if that makes a case for switching Ferrari shares into FCAU Link to comment Share on other sites More sharing options...
merkhet Posted January 12, 2016 Share Posted January 12, 2016 "He also said that Fiat Chrysler will make its financial targets of zero industrial debt and operating profit of 9 billion euros by 2018. That has to be net industrial debt right? I don't see how it's possible for FCA Group to be completely free of industrial debt by 2018. Link to comment Share on other sites More sharing options...
goldfinger Posted January 12, 2016 Share Posted January 12, 2016 "He also said that Fiat Chrysler will make its financial targets of zero industrial debt and operating profit of 9 billion euros by 2018. That has to be net industrial debt right? I don't see how it's possible for FCA Group to be completely free of industrial debt by 2018. Yes Link to comment Share on other sites More sharing options...
muscleman Posted January 13, 2016 Share Posted January 13, 2016 https://www.yahoo.com/autos/chrysler-to-debut-new-minivan-1338741604122678.html The new minivan looks pretty nice! Hope it rides comfortably as well. :) Link to comment Share on other sites More sharing options...
DCG Posted January 13, 2016 Share Posted January 13, 2016 What is that going to cost? Link to comment Share on other sites More sharing options...
Phaceliacapital Posted January 13, 2016 Share Posted January 13, 2016 Does that matter? It's 80 miles to the gallon!! Link to comment Share on other sites More sharing options...
Picasso Posted January 13, 2016 Share Posted January 13, 2016 80 MPG is probably fairly low considering it has a combination of electric and gas. It's essentially a Chevy Volt with more gas range. A long highway trip and you would be lucky to get 35-40 MPG. It's probably fairly expensive compared to the non-hybrid. Link to comment Share on other sites More sharing options...
muscleman Posted January 13, 2016 Share Posted January 13, 2016 80 MPG is probably fairly low considering it has a combination of electric and gas. It's essentially a Chevy Volt with more gas range. A long highway trip and you would be lucky to get 35-40 MPG. It's probably fairly expensive compared to the non-hybrid. That's true. This vehicle is mostly for buyers who drive to drop off their kids, go to shops, come home, pick up kids, and come home. This is definitely not for people who constantly drive their minivan across the country. :) The Toyota Prius Plug-in hybrid costs $8000 more than the standard prius. We will see how much more this Chrysler minivan costs! I wonder why they designed the minivan this way, instead of using the 3.6 V6 engine merely for electricity generation? In that case, the transmission can be removed, and the engine will always run under the most efficient speed, though there will be some electricity conversion loss. Link to comment Share on other sites More sharing options...
nikhil25 Posted January 14, 2016 Share Posted January 14, 2016 Two suburban Chicago Dealerships accuse Fiat Chrysler of falsifying U.S. sales: http://www.autonews.com/article/20160113/RETAIL01/160119818?template=mobile Hopefully, this is not indicative of a larger, more systemic problem Link to comment Share on other sites More sharing options...
muscleman Posted January 14, 2016 Share Posted January 14, 2016 Two suburban Chicago Dealerships accuse Fiat Chrysler of falsifying U.S. sales: http://www.autonews.com/article/20160113/RETAIL01/160119818?template=mobile Hopefully, this is not indicative of a larger, more systemic problem Hmm..... :o Link to comment Share on other sites More sharing options...
kranthi_vic Posted January 14, 2016 Share Posted January 14, 2016 Wow... :(...time to run for the hills?? Link to comment Share on other sites More sharing options...
muscleman Posted January 14, 2016 Share Posted January 14, 2016 Wow... :(...time to run for the hills?? I am more inclined to think this is not a massive issue. It will be hard to fake sales when you keep reporting numbers that increase 10-13% a year. Usually companies may fake sales if WS analysts like the consistent growth story and the company highly touts the consistent growth. FCAU's month to month sales increase is pretty volatile already, so it will be hard to imagine that they fake it so they can report a 13% increase instead of 12.9%. I'd like to hear from other members. :) ::) Link to comment Share on other sites More sharing options...
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