Research undertaken by auto industry analyst Rob Golding for just-auto shows that Fiat has outperformed all other major car companies on its share price in the twelve months to the end of March this year.
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Golding’s annual review of the major car groups’ financial performances showed that 2006 was a relatively frenetic trading year with mixed results for companies.
But Fiat was the outstanding performer on share price valuation in the year to the end of March this year. A resurgent Fiat’s share price rose by 89% in the period as its financial results improved on the back of restructuring and new models.
“There were some big swings in company valuations during 2006 as shareholders tried to get to grips with which of the stocks would survive the structural changes sweeping through the sector,” said Golding.
“In that respect, 2006 was a highly unusual year. Besides Fiat, DaimlerChrysler also showed good growth on the back of rising Chrysler sell-off speculation – which proved well founded, of course.
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By GlobalData“And GM’s share price also perked up. In contrast with Ford, GM is perceived to have come through the worst,” Golding added.
Golding also noted that Porsche and Volkswagen conjured a share price win-win out of thin air.
“Volkswagen has effectively been ‘kidnapped’ by its chairman, Ferdinand Piech, who is also the controlling shareholder in Porsche. It’s clear following the forced exit of Bernd Pischetsrieder that Piech is pulling the management levers at Wolfsburg and that Volkswagen and Porsche are getting closer,” maintained Golding.
And the share price losers?
“Hyundai and Kia took a sizeable hit last year on unfavourable exchange rates and some industrial unrest at home,” said Golding.
“However, Hyundai-Kia is positioning itself for future growth and investing in North America and Europe in particular, so this ought to be a temporary blip in terms of the group’s growing presence on the world stage. Already, Hyundai is worth more than Ford at US$15bn.”
Golding also observed that the financial markets appear to have heavily backed the Japanese carmakers to succeed in the long-term.
“What is truly staggering is the degree to which shareholders still believe that in the mass market, it is really only the Japanese who are a guaranteed, all-weather money-making machine. Toyota is worth a whopping US$234bn and Honda is worth US$63bn. Nissan, despite its recent fall from grace, is worth US$50bn.
“Toyota is worth more than the entire European car industry put together – Daimler included. Honda is worth more than Ford, GM and the Korean stocks put together, and Nissan could vacuum up all of the new companies in China and India without pausing for a share issue.”
Rob Golding’s full report, ‘In it for the money, who’s making it? A financial review of the world’s top car groups’ is available as a just-auto members’ management briefing at: https://www.just-auto.com/briefings/
