SwimmingNaked Posted February 19, 2016 Share Posted February 19, 2016 On top of "Jeep" being synonymous with SUV in China which Greenwood mentions (this is also true for other countries), apparently there are also 1000+ Jeep apparel stores in the country. Is there a better positioned brand in the auto industry than Jeep? Seems like this was the most capacity constrained, underdeveloped brand in the industry before Sergio got his hands on it. Also, does anyone legitimately think the person who wants to buy a Jeep or a RAM would opt out of that purchase in favour of some dinky ride sharing service even if the economics made sense (and forget for a second the convenience of car ownership altogether)? There's a lot of nonsense around this stuff going on right now, and it's amusing watching other auto execs get suckered into it. Anyways, even if ride sharing does impact car demand in the future or if Apple decides to "disrupt" the industry with an iCar, it would mostly impact demand for compact cars (a segment FCA doesn't care to be in), not Jeeps or RAM trucks or even performance cars like Challengers and Chargers, which people purchase for more reasons than just getting from point A to point B. Link to comment Share on other sites More sharing options...
bonkers Posted February 23, 2016 Share Posted February 23, 2016 We will see how long the market can continue to ignore Fiat's margin expansion and unit growth. I have made a naïve observation that car company share prices seem to be driven by earnings when they are there; in fact, smoothing e.g. Ford’s year-to-year earnings development for each good period gives fairly constant P/Es, e.g. for 1983-1989 around x6, and 1994-1999 around x5, and now 2010-2015 around x9. So, as long as FCA can increase its earnings, no matter what the multiple applied to it is, the stock should follow. Marchionne’s plan calls for tripling adj. NI from 2015 to 2018, times any change in current multiple. The main risk I see is the cash flow, which one can easily imagine turning negative at some point and thus to increase leverage, which would obviously be bad for EV. I cannot model the CF, but I presume it benefits from growth and high sales volumes. I have reasons to believe that NAFTA car market will remain quite strong, and combined with brand appeal (and streched capacity), FCA’s NAFTA factories will remain fully occupied, whereas there will be growth in Europe and China. Only negative is still little shrinkage in LATAM. So the overall cash flow picture is positive. This is supported by their latest guidance of increased cash flow. FCA has no need to increase its incentive spending, however, if Asians or GM & Ford start using them, maybe they’ll be forced to spend some. Still, in the short-term I see even more money (and margin) flowing from customers and dealers to car manufacturers with the right, fresh models. What I also cannot say is what will lead to the re-rating of FCA stock, especially once we some day cross NAFTA peak volumes. Will it be Tesla reporting problems with model 3 production? Google postponing their car, or Apple downscaling theirs? FCA announcing an alliance with Germans on autonomous driving? Better mood after this panic? FCA becoming net-debt-free and starting a dividend? Or analysts realizing that P/E < 2 even on a car company is a bit too cheap? One of the mysteries of our business, I guess. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted February 23, 2016 Share Posted February 23, 2016 We will see how long the market can continue to ignore Fiat's margin expansion and unit growth. I have made a naïve observation that car company share prices seem to be driven by earnings when they are there; in fact, smoothing e.g. Ford’s year-to-year earnings development for each good period gives fairly constant P/Es, e.g. for 1983-1989 around x6, and 1994-1999 around x5, and now 2010-2015 around x9. So, as long as FCA can increase its earnings, no matter what the multiple applied to it is, the stock should follow. Marchionne’s plan calls for tripling adj. NI from 2015 to 2018, times any change in current multiple. The main risk I see is the cash flow, which one can easily imagine turning negative at some point and thus to increase leverage, which would obviously be bad for EV. I cannot model the CF, but I presume it benefits from growth and high sales volumes. I have reasons to believe that NAFTA car market will remain quite strong, and combined with brand appeal (and streched capacity), FCA’s NAFTA factories will remain fully occupied, whereas there will be growth in Europe and China. Only negative is still little shrinkage in LATAM. So the overall cash flow picture is positive. This is supported by their latest guidance of increased cash flow. FCA has no need to increase its incentive spending, however, if Asians or GM & Ford start using them, maybe they’ll be forced to spend some. Still, in the short-term I see even more money (and margin) flowing from customers and dealers to car manufacturers with the right, fresh models. What I also cannot say is what will lead to the re-rating of FCA stock, especially once we some day cross NAFTA peak volumes. Will it be Tesla reporting problems with model 3 production? Google postponing their car, or Apple downscaling theirs? FCA announcing an alliance with Germans on autonomous driving? Better mood after this panic? FCA becoming net-debt-free and starting a dividend? Or analysts realizing that P/E < 2 even on a car company is a bit too cheap? One of the mysteries of our business, I guess. Let's hope a re-rating never occurs and we the CoBF board members can take it private at 1x earnings in the next 5 years :) Link to comment Share on other sites More sharing options...
goldfinger Posted February 24, 2016 Share Posted February 24, 2016 We will see how long the market can continue to ignore Fiat's margin expansion and unit growth. I have made a naïve observation that car company share prices seem to be driven by earnings when they are there; in fact, smoothing e.g. Ford’s year-to-year earnings development for each good period gives fairly constant P/Es, e.g. for 1983-1989 around x6, and 1994-1999 around x5, and now 2010-2015 around x9. So, as long as FCA can increase its earnings, no matter what the multiple applied to it is, the stock should follow. Marchionne’s plan calls for tripling adj. NI from 2015 to 2018, times any change in current multiple. The main risk I see is the cash flow, which one can easily imagine turning negative at some point and thus to increase leverage, which would obviously be bad for EV. I cannot model the CF, but I presume it benefits from growth and high sales volumes. I have reasons to believe that NAFTA car market will remain quite strong, and combined with brand appeal (and streched capacity), FCA’s NAFTA factories will remain fully occupied, whereas there will be growth in Europe and China. Only negative is still little shrinkage in LATAM. So the overall cash flow picture is positive. This is supported by their latest guidance of increased cash flow. FCA has no need to increase its incentive spending, however, if Asians or GM & Ford start using them, maybe they’ll be forced to spend some. Still, in the short-term I see even more money (and margin) flowing from customers and dealers to car manufacturers with the right, fresh models. What I also cannot say is what will lead to the re-rating of FCA stock, especially once we some day cross NAFTA peak volumes. Will it be Tesla reporting problems with model 3 production? Google postponing their car, or Apple downscaling theirs? FCA announcing an alliance with Germans on autonomous driving? Better mood after this panic? FCA becoming net-debt-free and starting a dividend? Or analysts realizing that P/E < 2 even on a car company is a bit too cheap? One of the mysteries of our business, I guess. Let's hope a re-rating never occurs and we the CoBF board members can take it private at 1x earnings in the next 5 years :) If CoBF members don't, Marchionne + Elkann will and massively; that's the beauty of a combination of lots of extra cash/non core assets to sell and a P/E of 1... Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 29, 2016 Share Posted February 29, 2016 vans are hot. http://www.usatoday.com/story/money/cars/2016/02/29/fiat-chryslers-ram-looks-expand-commercial-truck-sales/81095646/ Fiat Chrysler's Ram looks to expand commercial truck sales Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 2, 2016 Share Posted March 2, 2016 Sergio Marchionne Wants Fiat to Build an Apple Car http://www.bloomberg.com/news/articles/2016-03-02/-apple-freak-marchionne-keen-on-fiat-building-tech-giant-s-car Link to comment Share on other sites More sharing options...
goldfinger Posted March 2, 2016 Share Posted March 2, 2016 http://uk.reuters.com/article/us-fiat-chrysler-gruppo-espresso-media-idUKKCN0W40XX Shareholders are going to get extra shares of a media group by 2017... Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted March 2, 2016 Share Posted March 2, 2016 Sergio Marchionne Wants Fiat to Build an Apple Car http://www.bloomberg.com/news/articles/2016-03-02/-apple-freak-marchionne-keen-on-fiat-building-tech-giant-s-car His candidness is refreshing. Usually the industry comes into that dialogue with a high degree of arrogance as we know how to make cars. That’s not very helpful as [Apple's] syntax is worth more than our ability to build cars. Link to comment Share on other sites More sharing options...
LC Posted March 3, 2016 Author Share Posted March 3, 2016 http://uk.reuters.com/article/us-fiat-chrysler-gruppo-espresso-media-idUKKCN0W40XX Shareholders are going to get extra shares of a media group by 2017... Spinning off another (better?) businss to current shareholders, the majority of who are the Agnellis. Does Fiat own any other random businesses unrelated to mass-market cars? Link to comment Share on other sites More sharing options...
LC Posted March 3, 2016 Author Share Posted March 3, 2016 Sergio Marchionne Wants Fiat to Build an Apple Car http://www.bloomberg.com/news/articles/2016-03-02/-apple-freak-marchionne-keen-on-fiat-building-tech-giant-s-car His candidness is refreshing. Usually the industry comes into that dialogue with a high degree of arrogance as we know how to make cars. That’s not very helpful as [Apple's] syntax is worth more than our ability to build cars. The honesty and clarity is just amazing. I read the guy's conference calls because I want to. I have a freaking man crush over here. My dream as (a fellow italian) is to sip espresso, smoke a cigarette, and read the paper like 10 feet from him. And then get into a really loud argument with him over pasta. Link to comment Share on other sites More sharing options...
bizaro86 Posted March 3, 2016 Share Posted March 3, 2016 http://uk.reuters.com/article/us-fiat-chrysler-gruppo-espresso-media-idUKKCN0W40XX Shareholders are going to get extra shares of a media group by 2017... Spinning off another (better?) businss to current shareholders, the majority of who are the Agnellis. Does Fiat own any other random businesses unrelated to mass-market cars? Spin-off is an interesting way to deal with those shares, I would imagine it will punish the spun company, as how many of the car company shareholders are going to want a very small position in an Italian newspaper chain. Seems like there will be non-economic selling there for sure. Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted March 3, 2016 Share Posted March 3, 2016 Here's the official release: http://www.fcagroup.com/en-US/media_center/fca_press_release/FiatDocuments/2016/march/FCA_announces_plans_to_create_major_player_in_the_publishing_business.pdf Still not entirely clear about what all is being spun off. At first glance, it seems like FCA will spin its approximate 16% stake in the new Itedi-GELE merger, as well as its 16.7% stake in RCS MediaGroup. Or is there some relationship between Itedi and RCS that I'm missing? Link to comment Share on other sites More sharing options...
whatdadil9 Posted March 4, 2016 Share Posted March 4, 2016 I think the spin is emblematic. I think Sergio and John want people to refocus on SOTP here. There are other assets this company owns still. Maserati, Alfa Romeo, Parts, are all separate business units and as far as I can tell could all be spun or sold. If parts gets to 8 pct EBIT Margins on 7bn EUR sales (they just hired last year new CEO) then thats 5.6bn eur of value right there....thats almost 4 eur a share....not far from our existing share price... Link to comment Share on other sites More sharing options...
goldfinger Posted March 15, 2016 Share Posted March 15, 2016 As announced earlier: http://www.channelnewsasia.com/news/business/fiat-chrysler-gains-acces/2606052.html Link to comment Share on other sites More sharing options...
whatdadil9 Posted March 15, 2016 Share Posted March 15, 2016 Getting access to the 10bn EU of cash basically takes any liquidity/debt issues off the table. I expect them to voluntarily prepay alot more debt now... What are people waiting for? This de-ring fencing when paired with getting out of mass market cars (dodge/chrysler) sets this thing up very well and everyone is still yawning.. Link to comment Share on other sites More sharing options...
merkhet Posted March 24, 2016 Share Posted March 24, 2016 http://www.fcagroup.com//en-US/media_center/fca_press_release/FiatDocuments/2016/march/FCA_announces_pricing_of_its_offering_of_1-25_billion_in_3-75_Notes.pdf Nice interest rate. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted March 24, 2016 Share Posted March 24, 2016 Yes, everything going as planned! Link to comment Share on other sites More sharing options...
fareastwarriors Posted April 5, 2016 Share Posted April 5, 2016 http://www.marketwatch.com/story/fiat-chrysler-plans-new-discounts-on-cars-2016-04-01 The company intends to offer 0% financing for 84 months on the 2016 model-year Dodge Dart and Chrysler 200 starting Tuesday, according to three dealers who attended a meeting at the National Automobile Dealers Association convention in Las Vegas on Friday. That is a crazy long time... Link to comment Share on other sites More sharing options...
merkhet Posted April 5, 2016 Share Posted April 5, 2016 http://www.marketwatch.com/story/fiat-chrysler-plans-new-discounts-on-cars-2016-04-01 The company intends to offer 0% financing for 84 months on the 2016 model-year Dodge Dart and Chrysler 200 starting Tuesday, according to three dealers who attended a meeting at the National Automobile Dealers Association convention in Las Vegas on Friday. That is a crazy long time... Yup. They gotta get rid of the passenger cars no one seems to want to buy... Link to comment Share on other sites More sharing options...
Jurgis Posted April 6, 2016 Share Posted April 6, 2016 http://www.marketwatch.com/story/fiat-chrysler-plans-new-discounts-on-cars-2016-04-01 The company intends to offer 0% financing for 84 months on the 2016 model-year Dodge Dart and Chrysler 200 starting Tuesday, according to three dealers who attended a meeting at the National Automobile Dealers Association convention in Las Vegas on Friday. That is a crazy long time... Yup. They gotta get rid of the passenger cars no one seems to want to buy... Maybe it's the wrong question to ask, but why FCAU is producing cars "no one seems to want to buy" on Marchionne's watch? Isn't he supposed to be optimizing this company? Thanks Link to comment Share on other sites More sharing options...
merkhet Posted April 6, 2016 Share Posted April 6, 2016 http://www.marketwatch.com/story/fiat-chrysler-plans-new-discounts-on-cars-2016-04-01 The company intends to offer 0% financing for 84 months on the 2016 model-year Dodge Dart and Chrysler 200 starting Tuesday, according to three dealers who attended a meeting at the National Automobile Dealers Association convention in Las Vegas on Friday. That is a crazy long time... Yup. They gotta get rid of the passenger cars no one seems to want to buy... Maybe it's the wrong question to ask, but why FCAU is producing cars "no one seems to want to buy" on Marchionne's watch? Isn't he supposed to be optimizing this company? Thanks These are old passenger cars that they've already produced, and Fiat has indicated that they're looking for a partner to produce passenger cars so they can free up their capacity for SUVs, trucks & Jeeps. So he is optimizing the company, but they've got to get rid of the old inventory. Link to comment Share on other sites More sharing options...
Jurgis Posted April 6, 2016 Share Posted April 6, 2016 These are old passenger cars that they've already produced, and Fiat has indicated that they're looking for a partner to produce passenger cars so they can free up their capacity for SUVs, trucks & Jeeps. So he is optimizing the company, but they've got to get rid of the old inventory. OK. So this is being dealt with but the optimization is not completed yet. Understood. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted April 6, 2016 Share Posted April 6, 2016 Yes, and all the capacity will go the higher margin products so it's a good plan going forward. Link to comment Share on other sites More sharing options...
gokou3 Posted April 6, 2016 Share Posted April 6, 2016 http://www.marketwatch.com/story/fiat-chrysler-plans-new-discounts-on-cars-2016-04-01 The company intends to offer 0% financing for 84 months on the 2016 model-year Dodge Dart and Chrysler 200 starting Tuesday, according to three dealers who attended a meeting at the National Automobile Dealers Association convention in Las Vegas on Friday. That is a crazy long time... Yup. They gotta get rid of the passenger cars no one seems to want to buy... Maybe it's the wrong question to ask, but why FCAU is producing cars "no one seems to want to buy" on Marchionne's watch? Isn't he supposed to be optimizing this company? Thanks One of two shifts gone.. Fiat Chrysler cuts 1,300 workers in Michigan, scraps shift http://finance.yahoo.com/news/fiat-chrysler-cuts-shift-1-171036369.html Link to comment Share on other sites More sharing options...
bbarberayr Posted April 15, 2016 Share Posted April 15, 2016 Anyone have any idea how much FCAU shareholders will receive from the RCA distribution? http://finance.yahoo.com/news/fca-announces-plans-completing-distribution-121700931.html There is supposed to be info on the US web site, but can't find anything. Link to comment Share on other sites More sharing options...
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