![[Valid Atom 1.0]](valid-atom.png "Validate my Atom 1.0 feed")
TRUCKMAKERS WORLDWIDE * COMMENTS ABOUT
* Thoughts on Volvo, GAZ and Renault SA
London,UK -The World Trucks Blog -22 Aug 2008: -- We read Neil Winton's views pertaining to Renault SA - go here for the full article in the Detroit News ... Winton refers to the views of Morgan Stanley analyst Adam Jonas, who argues that the margin targets, issued recently by Renault SA, and which see profit margins up to six per cent by 2009 would appear to be dependant upon restructuring. S&P Credit analyst Barbara Castellano argues that: "(The outlook revision) reflects increasing uncertainty on Renault's ability to maintain sound cash generation and to avoid a pronounced weakening of its financial ratios." Credit Suisse are just plain nasty: "(Renault's) guidance lacks credibility" is its view... Restructuring seems to be the word of the moment, and we can think of no better asset of which to be rid of than Renault SA's large stake in AB Volvo. We know that we've been down this road before, but hang on with us... Renault wants to be Europe's most profitable car company with sales of 800,000 units per year, and the aforementioned margin of six per cent... We do not see any real evidence of Renault SA leveraging its stake in AB Volvo in terms that might aid the former in its pursuit of European vehicular supremacy. So, take the money and run would seem to be the best advice, although no doubt McKinsey's would add a few months to that sentence... But the suggestion demands that there is someone with some money who is prepared to join in the game. Hello Oleg; Mr Deripaska has a supposed $28 billion in the kitty, along with a reputation for being - shall we say - businesslike... Deripaska, GAZ and AB Volvo already have links; think licenced Renault engines. GAZ has made no secret of it wishes to sit at the big table in terms of trucks, and, leaving every other comment about the growth potential of the Russian market on one side for the moment, organic growth ain't going to get him - them - it - there. But a 20 per cent piece of AB Volvo might just cause some pulses to quicken some... We know, we've said it all before, but surely here is a situation in which company A has an asset and a need for money, and company B has some money, and the need for an asset. Supply and Demand as one Guy Steele-Bodger explained to us in Lower Sixth Economics. Generally speaking it's a good thing all round... Will it happen? We don't know, but we think that it's far more likely now than ever before. Logic would suggest that money would be better invested in Magic Beans than the automotive business at present, a factor reflected in share prices across the board, and which means but one thing...
Labels: truckmakers' comments
posted by Unknown @ 7:42 PM
0 Comments:
Post a Comment
<< Home