VW may have passed Toyota (NYSE: TM) as the world's No.1 car company just as Toyota passed GM (NYSE: GM) a year ago. Unfortunately, the companies all operate in an industry where being on the top of the pile does not matter much these days. It is probable that each of these firms loses money on the great majority of the cars they sell. To make matter worse, market share may be a weakness as the auto industry moves out of the recession.

It seems more and more likely that modest sized and nimble auto makers like BMW and Hyundai, who do not have to maintain factories in distant corners of the world and do not have to develop and market dozens of individual products, may hold an advantage in a fragmented car industry. The behemoths rely on their ability to maintain massive capital spending and their cost structures can do them nearly irreparable harm in a weak economy.

Continue reading Volkswagen may be number one

Volkswagen may be number one originally appeared on BloggingStocks on Fri, 17 Apr 2009 15:40:00 EST. Please see our terms for use of feeds.

We all know the impact that the current economic slowdown has had on American auto sales, and today we get news that European car sales are also feeling the pain, with auto sales dipping 15% during the month of October.

According to the European Automobile Manufacturers Association, or the ACEA, October marks the sixth straight month that new-car registrations have fallen, but things have been much worse since the summer, when concerns of a global recession really started to spread.

General Motors Corporation (NYSE: GM) was the worst hit major American automaker, which had a 25% decline in sales in October on a year over year basis. Japanese maker, Toyota Motor Company (NYSE: TM) did not fare to much better, with a 24% dip in sales. Ford Motor Company (NYSE: F) did a little bit better, with a reported 11.9% decline in October sales. Europe's largest automaker, Volkswagen, held up the best among the majors, with "only" a 7.9% drop.

Continue reading Financial crisis impacts the European car market

Financial crisis impacts the European car market originally appeared on BloggingStocks on Fri, 14 Nov 2008 16:32:00 EST. Please see our terms for use of feeds.

Losses could top $38 billion for 100 hedge funds that sold 13% of VW shares short. Specifically, traders shorted the common shares and bought the preferred. The logic was that since the common traded at a 50% premium to the preferred, the common would drop so the spread would narrow. Instead, the common shares soared and the preferred ones collapsed.

Why the short squeeze? This weekend Porsche revealed that it had lifted its stake in VW from 42.6% to 75% using derivatives. This was a problem because it meant that the free float available to cover a short position was reduced from 45% to 5.8%. The resulting panic buying drove VW's market capitalization above that of ExxonMobil (NYSE: XOM). Now shareholders are angry at how Porsche could use derivatives to gain a 45% stake in VW without disclosing them.

Continue reading VW trade leaves hedge funds in tears

VW trade leaves hedge funds in tears originally appeared on BloggingStocks on Fri, 31 Oct 2008 13:11:00 EST. Please see our terms for use of feeds.

Morgan Stanley plunges 25%, Goldman 10%; other financials stable originally appeared on BloggingStocks on Tue, 28 Oct 2008 11:26:00 EST. Please see our terms for use of feeds.

I am the Global Editor at MoneyShow.com and each week I interview an investing expert. This week, I spoke with Christoph Scherbaum, editor of the German edition of Personal Finance, who says German investors are cautious, but optimistic about their market.

Q. Christoph, some experts predict the beginning of a prolonged slowdown that will push consumer price inflation in Germany to as low as 2% next June. What do you think?

A. Consumer prices are not really a problem. August inflation was less than 4% and is estimated at 3% until year-end. The delayed effects of rising commodity prices will have a steeper decline. In addition, second-round effects through higher wage developments are now more visible. Therefore, the European Central Bank-despite poor economic data-will wait for a reassessment of its inflation target for 2010 until the second half of 2009

Q. To what extent do you think the US's financial worries are extending to German financial institutions?

A. It's a difficult question, but we have no big problem with our banks. German Finance Minister Peer Steinbrueck recently stated: "Although this financial crisis undoubtedly is the biggest economic risk for the German economy, I think the potential impact on us-after inquiries and interviews with the Bundesbank president-to be limited". He also reaffirmed the intent of a balanced federal budget in 2011.

Continue reading Global Q&A: Guten Tag to Germany

Global Q&A: Guten Tag to Germany originally appeared on BloggingStocks on Tue, 23 Sep 2008 12:20:00 EST. Please see our terms for use of feeds.

Volkswagen aims to overtake Ford as third-largest automaker originally appeared on BloggingStocks on Mon, 21 Jul 2008 13:11:00 EST. Please see our terms for use of feeds.

Continue reading Volkswagen: A rising competitor for Detroit?

Volkswagen: A rising competitor for Detroit? originally appeared on BloggingStocks on Thu, 10 Jul 2008 11:24:00 EST. Please see our terms for use of feeds.

Hurt by declining consumer spending, Fiat saw its sales plunging 16.5% in June. But this was not the worst and Peugeot warned about "an even greater slowdown" for European demand in the second half of the year. "The rest of the year is going to be a disaster for European manufacturers,'' Stephen Pope, London-based chief global market strategist at Cantor Fitzgerald Europe, stated in a report on Bloomberg.

Continue reading Peugeot, Fiat face consumer spending woes

Peugeot, Fiat face consumer spending woes originally appeared on BloggingStocks on Tue, 08 Jul 2008 16:27:00 EST. Please see our terms for use of feeds.

General Motors (NYSE: GM) will try to increase its market share in China during the second half of the year. The overall market there is growing at a 21% rate in 2008. According to Bloomberg, "The Detroit-based automaker plans to invest $1 billion annually in China over the next three to five years."

GM will introduce a number of new models in the big Asian country, one of which will be a hybrid.

But, sales in China may not be enough to help to GM. Its market share is still dropping in a weak U.S. market. While China may not have been a competitive market a decade ago, every major auto company in the world wants a piece of the action now.

GM is up against Toyota (NYSE: TM), Volkswagen, and several other companies that already have large factories and joint-ventures with local operators. The home-grown Chinese companies do not want to be bested by their foreign rivals. In other words, GM is hoping to get much of its international growth out of the most sought-after market in the world.

Without a big win in China, GM's global problems could deepen.

Douglas A. McIntyre is an editor at 247wallst.com.

GM to push for more China sales originally appeared on BloggingStocks on Sun, 20 Apr 2008 13:10:00 EST. Please see our terms for use of feeds.

Nissan and Chrysler will begin to build full-sized pick-ups together. According to The Wall Street Journal, "Chrysler will start building a large pickup for Nissan at its truck plant in Saltillo, Mexico." Nissan will also build some small cars for the US company.

The deal allows both companies to increase output from some of their plants, making more efficient use of manufacturing facilities and the arrangement could also cut design costs for the two automakers.

The new partnership raises the question of whether embattled Ford (NYSE:F) should do the same thing. Ford's shares trade between $6 and $7 most days, about where they were when there were rumors of Chapter 11 two years ago. Ford now has only about 15% of the US market, and, if that share falls more, it has to raise the question of how viable it is for Ford to "go it alone" in the US market.

Ford could turn to several partners, but the most obvious one is Volkswagen. VW has said that it wants to expand into the US market and has had little success here. Since Ford losses money on many of its smaller cars, an area where VW is strong, it may make sense for Ford to take VW-produced cars for its domestic dealers and have a piece of a profitable joint venture instead of losing billions on its own.

At the end of the day, Ford has to do something.

Douglas A. McIntyre is an editor at 247wallst.com.

Could Nissan tie-up with Chrysler be model for Ford (F)? originally appeared on BloggingStocks on Tue, 15 Apr 2008 10:45:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Susquehanna downgraded Priceline.com (NASDAQ: PCLN) to Neutral from Positive as they believe upside may be difficult given the macro environment, competition, and currency headwinds.
  
• JP Morgan lowered Monster (NASDAQ: MNST) to Neutral from Overweight following the company's expectations for higher 1Q08 operating expenses.
  
• Internap (NASDAQ: INAP) was downgraded by Merriman to Neutral from Buy as they believe upside will be limited until the company can complete its integration of the VitalStream CDN acquisition.

• JP Morgan cut Sara Lee (NYSE: SLE) and Kraft Foods (NYSE: KFT) to Neutral from Overweight.
  
• Volkswagen (OTC: VLKAY) was downgraded at WestLB to Add from Buy.
  
• Merrill downgraded Getty Realty (NYSE: GTY) to Sell from Neutral.

Analyst downgrades: Priceline.com, Monster, Internap originally appeared on BloggingStocks on Wed, 19 Mar 2008 11:42:00 EST. Please see our terms for use of feeds.

Volkswagen says that by 2010 it can produce 10 million vehicles and pass Toyota (NYSE: TM) and General Motors (NYSE: GM) as the world's largest car company. According to the Sunday Times, "To those who suggest that closing a 3m vehicle gap (Toyota produced 9.4m last year) is a very tall order, company management explains that, in 2006, the number of conventional passenger cars made by Volkswagen and Toyota was fairly similar -- 5.2m for Volkswagen and 5.5m for Toyota -- and that the difference is made up by 4x4s, 'people carriers' and light trucks."

Volkswagen only recently introduced a full range of these multi-purpose vehicles, which will play an important part in its future growth

VW may find that things don't go as planned. As a new entrant to the pick-up and SUV markets, the company will find global competition for not just Toyota and GM, but also Ford (NYSE: F), Nissan, and Honda (NYSE: HMC). Most large countries also have local car manufacturers who may not be anxious to give up a large piece of their business.

While VW may have a chance to get a reasonable piece of the auto sales in huge countries like China, it has almost no market share in the world's largest car-buying nation, the U.S. Taking away business from a desperate company like Ford and a successful company like Toyota may be nearly impossible.

Douglas A. McIntyre is an editor at 247wallst.com.

VW tries to overtake Toyota and General Motors in worldwide sales originally appeared on BloggingStocks on Sun, 09 Mar 2008 12:10:00 EST. Please see our terms for use of feeds.

Continue reading Porsche profit jumps 44% on strong Cayenne sales

Porsche profit jumps 44% on strong Cayenne sales originally appeared on BloggingStocks on Tue, 04 Mar 2008 12:12:00 EST. Please see our terms for use of feeds.

Continue reading As dollar falls, foreign automakers plan U.S. factories

As dollar falls, foreign automakers plan U.S. factories originally appeared on BloggingStocks on Wed, 12 Dec 2007 14:35:00 EST. Please see our terms for use of feeds.

• News Corp.'s (NYSE: NWS) MySpace is investing heavily in games to go along with its successful music and video offerings, and beginning in January, thanks to a deal with games distributor Oberon, will offer hundreds of free "casual" games, reported the Wall Street Journal (subscription required).
  
• The European Court of Justice in Luxembourg overturned a law that had been on the books in Germany since 1960 to prevent hostile foreign takeovers, reported the Wall Street Journal. The immediate result is expected to be a takeover attempt by Porsche, a 31% holder of Volkswagen (OTC: VLKAY) shares.

• Mobile Telecom company France Telecom (NYSE: FTE) is close to creating a joint venture for long distance operations in India with Indian optical storage manufacturer Moser Baer, reported the Economic Times.
• British financial services company HSBC Holdings (NYSE: HBC) is looking to sell Marbles, the online credit card business it acquired in 2003, reported the Independent.
• The first undersea telecommunications cable linking China and the U.S. -- called the Trans-Pacific Express -- has begun to be constructed, reports the Associated Press, and it's expected to be in place before the Beijing Olympics next July. Verizon Communications (NYSE: VZ) is involved and says the cable will be 11,000 miles long and cost about $500M.

Newspaper wrap-up: 'Volkswagen law' overturned originally appeared on BloggingStocks on Tue, 23 Oct 2007 09:11:00 EST. Please see our terms for use of feeds.

Volkswagen has continued to do well in its home market and the rest of Europe. It is also the leading seller of cars in China, competing with GM (NYSE: GM) for the top spot. But, since it sold its compact Beetle sedan here in the 1960s, VW has become a nothing brand in the U.S.

Now the management of VW wants to change all of that, and compete with Toyota (NYSE: TM) for U.S. share using high quality, no-frills cars. According to The Wall Street Journal, Volkswagen has said it wants to sell about 1 million cars annually in the U.S. by 2018, compared with about 330,000 last year.

VW plans to add 12 new models over the next several years and keep prices of models like the Jetta and Passat below comparable Toyota models.

And, that will pick up market share in the U.S.? VW, dream on.

VWs don't sell well in the U.S. because no one wants to buy them. It is not as if the company does not have plenty of dealerships. Its luxury model, Audi, does just fine. But how many car buyers say, "I just have to have one of those new VWs"?

The German car maker is also coming up against stronger products from the locals, Ford (NYSE: F) and GM. Selling cars in the U.S. is part of a life-and-death struggle for them to hold sales in their home market.

VW should keep its focus on China.

Douglas A. McIntyre is an editor at 247wallst.com

Volkswagen to challenge Toyota in the U.S. originally appeared on BloggingStocks on Thu, 18 Oct 2007 07:23:00 EST. Please see our terms for use of feeds.

Continue reading This week in Advertising Age

This week in Advertising Age originally appeared on BloggingStocks on Sat, 06 Oct 2007 14:40:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Barron's Online's (subscription required) "Weekday Trader" is inclined to take profits in the disk-drive market while others are popping the champagne; specifically in Western Digital Corporation (NYSE: WDC), which Barron's wrote about positively four months ago and has appreciated 29.6%.
• Emerging markets are outperforming their U.S. and European counterparts this year, but investing in some countries -- including Turkey and Hungary -- is still risky, according to the "Heard on the Street" column in today's Wall Street Journal (subscription required).
• The Financial Times (subscription required) reported that Russian oil company Lukoil Holding (OTC: LUKOY), which is 20% owned by ConocoPhillips (NYSE: COP), is planning a $9B European spending spree.

• The Los Angeles Times reported that Washington Mutual Inc (NYSE: WM), the largest U.S. savings and loan bank, will close two mortgage divisions, resulting in about 1,000 job cuts.
• Spanish telecommunications company Telefonica SA (NYSE: TEF) said it is in talks with Apple Inc (NASDAQ: AAPL) concerning the right to sell the company's new phone, the iPhone, in Spain, next summer, Telecom Paper (subscription required) reported.

• A rumored partnership between Apple and Volkswagen AG (OTC: VLKAY) to develop an "iCar" with iPod connectivity could benefit both companies but is unlikely to yield an actual automobile for three or four years, according to market intelligence firm iSuppli Corp., reported AppleInsider.com.

Newspaper wrap-up: Lukoil planning a $9B spending spree originally appeared on BloggingStocks on Thu, 13 Sep 2007 09:08:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• After less than a year in office, Shinzo Abe, the prime minister of Japan, resigned, reported the Wall Street Journal.
• With its sights set on Toyota Motor Corporation (NYSE: TM), Volkswagen AG (OTC: VLKAY) CEO Stefan Jacoby says he'll nearly triple sales of vehicles in the U.S. over the next decade, reported the Wall Street Journal.
• Barron's Online's "Inside Scoop" column reported that director James Burke purchased $1.1M worth of AnnTaylor Stores Corporation (NYSE: ANN) stock on Friday, marking the first open-market purchase by an AnnTaylor insider in at least five years, according to InsiderScore.com.

• According to the U.K. Times, British bank Barclays (NYSE: BCS) has invested $1.5B in Golden Key, a fund that has gotten into trouble as a result of the global liquidity squeeze.
• Aluminum company Alcan Inc (NYSE: AL) is reportedly in talks to sell its packaging unit to India's Essel Group, reported the Economic Times.
• Music publishers have intensified their efforts to shut down popular Web sites that publish song lyrics without permission, reported the New York Post. The publishers are also demanding that Google Inc (NASDAQ: GOOG) and Yahoo! (NASDAQ: YHOO) remove all references to the offending sites from their search engines.

Newspaper wrap-up: Barclays to bail out Golden Key originally appeared on BloggingStocks on Wed, 12 Sep 2007 09:10:00 EST. Please see our terms for use of feeds.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

Apple (AAPL) and Volkswagen chiefs talk - Will your next car be an iCar? originally appeared on BloggingStocks on Thu, 30 Aug 2007 09:01:00 EST. Please see our terms for use of feeds.