- Fiat is trying to push that its brand is stylish and hip, but it may have gone too far.
- Sales rose 18% in May and 17% since the beginning of the year, but the new ad campaign may cause a slowdown.
- Fiat's new ad campaign is courageous but very risky. Fiat should focus its marketing on its practicality and quantifiable facets instead of offending the senses.
- Fiat Chrysler Automobiles (FCA) presented recently its ambitious five-year strategic plan, aiming at strong growth and higher profitability during 2014-2018.
- Its targets are mainly dependent on major expansion of both the Jeep and Alfa Romeo brands, which are expected to post unit sales CAGR of 22% and 40%, respectively.
- No equity issuance is expected, net debt should be stable until 2016, and free cash flow should improve, something that the market is clearly questioning if it is reasonable.
- Despite the low likelihood of this plan being achievable, Fiat has good value over the long term, even if the company does not completely deliver on its targets.
Fiat Chrysler: The Valuation Is Cheap Even If You Do Not Believe In The 2018 Targets
- Investors gave little credit yesterday to Fiat’s 2018 targets: the group plans notably to increase its net income to around EUR5bn in 2018 from EUR0.9bn in 2013.
- They also remained concerned about the group’s balance sheet.
- But we remain confident that a mix of capital increase, disposals and improving cash generation will gradually reduce the group’s debt and the stock beta and sustain the rerating.
- Even assuming a 30% miss on 2018 targets and a capital increase, the stock’s 2018 P/E would be cheap around 3.5x.
- Cheap valuation – absolute and especially on relative basis vs General Motors and Ford.
- A very solid CEO - Sergio Marchionne was the 5th CEO in just 2 years before he took over in 2004.
- Boost from recent Chrysler acquisition - Fiat is now the 7th largest auto company in the world.
- Bad economic conditions in Southern Europe - have affected the company negatively.
- New premium strategy - less vulnerability to cyclical economic downturns.
A Call On The European Car Industry: Long Peugeot, Short Fiat
- How to get exposed to a recovery of European car industry? Be long Peugeot, short Fiat.
- Peugeot's new "ticket," with Tavares as CEO and Gallois as chairman, is very promising.
- Product lineup is far richer at Peugeot than at Fiat.
- Geo mix: A call option on China for Peugeot, vs. U.S. exposure for Fiat.
- Valuation: Two cash-burning companies, but Peugeot looks cheaper on multiples.
Wed, Oct. 1, 8:12 AM
- Chrysler (OTCPK:FIATY) reports it recorded its best September since 2005.
- Brand sales growth: Fiat +6%; Chrysler +14%; Jeep +47%; Dodge -9%; Ram +35%.
- Model sales growth: Jeep Patriot +51% to 9,117; Jeep Wrangler +16% to 13,955; Jeep Grand Cherokee -14% to 12,854; Jeep Cherokee (new) 14,639; Dodge Caravan +3% to 11,75; Dodge Ram P/U +30% to 36,612, Chrysler Town & Country +23% to 13,029.
- The automaker says it ended the month with 71 days supply of inventory vs. 64 days last month.
Wed, Oct. 1, 8:05 AM
Mon, Sep. 29, 2:58 AM
- Apple (NASDAQ:AAPL) will face accusations this week from the European Commission, as the preliminary findings over its tax affairs in Ireland are made public.
- European regulators will accuse Apple of benefiting from illicit state aid in Ireland for more than two decades, which could leave the company with a record fine of as much as several billions of euros, FT reports.
- The probe is part of a formal investigation into European corporate tax codes, which is also investigating Fiat (OTCPK:FIATY) and Starbucks (NASDAQ:SBUX).
Thu, Sep. 25, 3:00 PM
- Kelley Blue Book estimates U.S. auto sales increased 9% in September to 1.24M units.
- The sales forecast for the year is raised to 16.4M units from 16.3M.
- The compact SUV/crossover segment showed the strongest growth during the month with sales rising at a 19.1% clip, according to KBB.
- KBB sales forecast by manufacturer: General Motors (NYSE:GM) +15.9% to 217K; Toyota (NYSE:TM) +7.0% to 176K; Ford (NYSE:F) -2.4% to 180K; Chrysler (OTCPK:FIATY) +17.5% to 168K; Honda (NYSE:HMC) +11.8% to 118K; Nissan (OTCPK:NSANY) +17.4% to 102K; Hyundai (OTC:HYMLF) +10.6% to 103K; Volkswagen (OTCQX:VLKAY) +3.9% to 50K.
Thu, Sep. 25, 2:04 PM
- Chrysler (OTCPK:FIATY) recalls 394K older vehicles due to an ignition-switch issue.
- The recall action covers Dodge Charger, Dodge Magnum, Chrysler 300, Jeep Commander, and Jeep Grand Cherokee vehicles from early in the 2008 model year.
- The automaker says it's only aware of a single minor accident related to the issue.
Fri, Sep. 19, 4:10 AM
- Fiat (OTCPK:FIATY) has signed a memorandum of understanding with Mitsubishi Motors (OTCPK:MMTOF) to work toward manufacturing and developing a mid-sized pickup truck based on the next generation L200.
- Separately, Mitsubishi is also due to supply its made-in-Thailand Attrage sedan to Chrysler for sale in Mexico.
Thu, Sep. 18, 3:16 AM
- The Consumer Financial Protection Bureau has put forward a plan to begin supervising the finance units of major car companies, overseeing the 38 largest nonbank lenders in the automotive industry.
- Under the plan, the regulator will scrutinize whether nonbank car-loan providers are discriminating against minorities, using deceptive tactics in marketing loans and following debt-collection laws.
- The new plan would put the finance divisions of major automakers under federal supervision for the first time.
- Related tickers: GM, F, TM, OTCPK:FIATY, HMC, OTCPK:NSANY, TSLA, OTCQX:VLKAY, OTCPK:DDAIF, OTC:HYMLF, OTCPK:BAMXY, KMX
Wed, Sep. 17, 7:36 AM
- Automobile registrations increased 1.8% to 701K vehicles in August, according to the European Automobile Manufacturers Association.
- The rate of monthly growth is the slowest of the year.
- Sales declined slightly during the month in Germany, France, and Italy.
- Sales growth by automaker: Volkswagen (OTCQX:VLKAY) +9.4%, Peugeot (OTCPK:PEUGY) +1.9%, Fiat (OTCPK:FIATY) -2.8%, General Motors (NYSE:GM) -14.7%, Renault (OTC:RNSDF) -3.1%, Daimler (OTCPK:DDAIF) -5.3%, Toyota (NYSE:TM) -6.2%, Ford (NYSE:F) +17.4%, BMW (OTCPK:BAMXY) -1.4%, Fiat (OTCPK:FIATY) -2.8%, Nissan (OTCPK:NSANY) +1.6%, Hyundai (OTC:HYMLF) +2.0%.
Thu, Sep. 11, 7:54 AM
Thu, Sep. 11, 6:18 AM
- Continuing the crack down on foreign automakers in China, anti-monopoly regulators have fined a Chinese Volkswagen (OTCQX:VLKAY) joint venture $40.6M for fixing prices on vehicles and parts with dealers. A local arm of Fiat (OTCPK:FIATY) was also fined.
- The probes from Chinese antitrust officials are part of a broader investigation taking place across many industries in the country. China's regulators say the recent investigations will widen market access for foreign firms and increase transparency.
Thu, Sep. 11, 3:53 AM
- Following Luca Cordero di Montezemolo departure as chairman of Ferrari, he will receive a combined severance package of €27M ($34.8M).
- Fiat (OTCPK:FIATY) says Montezemolo will receive a lump sum of €13.3M by next February, in return for agreeing not to compete with Fiat until March 2017.
- As of Oct. 13, CEO Sergio Marchionne will become Ferrari's new chairman, and will guide the unit within the newly created Fiat Chrysler Automobiles group.
Wed, Sep. 10, 9:30 AM
- Fiat (OTCPK:FIATY) CEO Sergio Marchionne will step in as the new chairman of Ferrari after Luca Cordero di Montezemolo was shown the door by the automaker.
- Marchionne is believed to have ambitious plans for Ferrari within the soon-to-debut Fiat Chrysler Automotive.
- Fiat owns close to 90% of Ferrari.
Wed, Sep. 10, 4:34 AM
- Luca Cordero di Montezemolo will step down as chairman of Ferrari on Oct. 13 to be replaced by Fiat (OTCPK:FIATY) CEO Sergio Marchionne.
- The resignation follows many disagreements between the two execs, centered around Ferrari's role within the Fiat group.
- As Ferrari's chairman since 1991, Montezemolo had been stressing the need to keep Ferrari autonomous, while Marchionne looked to better integrate it within the group.
Mon, Sep. 8, 8:33 AM
- Morgan Stanley takes a cautious view on the U.S. automobile industry in a sector-wide downgrade.
- Easy financing and leasing terms is pulling forward demand from the future, according to a forecast from MS.
- The investment firm's price target on General Motors (NYSE:GM) was reduced to $29 from $33.
- Related stocks: TM, OTCPK:FIATY, HMC, OTCPK:NSANY, TSLA, OTCQX:VLKAY, OTCPK:DDAIF, OTC:HYMLF, OTCPK:BAMXY.
- Previous: Ford cut to Underweight by MS.
Thu, Sep. 4, 12:23 PM
- Fiat Chrysler Automobiles (OTCPK:FIATY, FCAU) may list an additional $1.04B in stock on the NYSE after shares start trading later this year, according to analysts.
- The company says it "learned a lot" from the liquidity problems of CNH Industrial which spun off from Fiat in 2011, prompting it to consider the stock offering.
- The extra cash will also go to support Fiat's aggressive growth plans.
Wed, Sep. 3, 12:58 PM
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