Automotive News - October 27, 2008 - (Page 33) OCTOBER 27, 2008 • 33 SHAREHOLDER RETURN REPORT Shareholder value tumbles in 3rd quarter By Jim Henry autonews@crain.com GLOBAL SUPPLIERS Total shareholder return for largest global suppliers; percentage change in the period Q3 2008 1 Bridgestone 2 Johnson Controls 3 ArvinMeritor 4 Futaba 5 Hankook 6 Delphi Ordinary 7 Hyundai Mobis 8 Valeo 9 Rieter 10 Kanto 11 Dana Holding 12 Michelin 13 Visteon 14 Magna 15 TRW Auto 16 Goodyear Tire TSR Index 17 Continental 18 Tenneco 19 GKN 20 Lear 21 BorgWarner 22 Aisin Seiki 23 Autoliv 24 Plastic Omnium 25 Calsonic 26 JTEKT 27 Denso 28 Takata 29 NHK Spring 30 Faurecia Ord 31 NSK 32 Amer Axle 33 Koito 34 Stanley Electric 35 Tokai Rika 36 Toyoda 37 Toyota Boshoku 20.8 6.2 5.1 2.7 –0.6 –5.5 –5.5 –6.8 –7.7 –7.7 –9.5 –10.9 –11.8 –13.0 –13.9 –14.1 –18.1 –20.1 –21.4 –21.5 –26.0 –26.0 –26.6 –26.9 –28.1 –28.3 –28.9 –29.7 –31.0 –31.7 –32.4 –32.6 –32.7 –33.7 –38.6 –39.1 –42.8 –59.3 One year –14.7 –21.7 –20.1 –18.2 –31.9 –84.9 –27.2 –43.1 –42.2 –9.0 N/A –51.1 –54.9 –45.8 –49.8 –49.7 –37.6 –39.0 –65.7 –51.7 –67.3 –27.8 –38.9 –41.8 –59.3 –25.2 –35.1 –34.9 –64.7 –27.4 –63.4 –31.3 –78.2 –23.3 –37.6 –54.1 –53.4 –67.4 Three years –7.5 53.3 –15.7 –23.2 9.2 –97.5 –3.0 –18.8 11.2 –2.0 N/A 16.6 –76.3 –27.7 –45.8 –1.8 –7.9 5.8 –39.3 –27.4 –68.5 19.1 –9.4 –15.7 –41.9 –49.0 –21.6 –12.0 N/A –21.7 –62.2 15.8 –74.6 –19.7 3.3 –40.3 –8.2 –36.4 GLOBAL AUTOMAKERS Total shareholder return for largest global automakers; percentage change in the period Q3 2008 35.8 8.1 –8.2 –9.8 –10.4 –13.0 –13.8 –17.8 –18.1 –18.3 –19.4 –20.0 –22.5 –23.5 –23.8 –30.7 –31.6 –37.5 –43.9 One year 75.0 –38.8 –24.8 –23.5 –28.2 –74.3 –10.0 –73.5 –49.6 –29.9 –54.9 –38.6 –37.8 –54.2 –58.8 –48.8 –53.3 –33.9 –52.3 Three years 562.5 –44.8 2.9 –18.7 13.8 68.4 15.0 –65.6 –4.9 –32.1 53.3 –13.1 1.2 –25.8 –33.6 43.8 –40.3 13.2 –23.8 About shareholder return The data on this page represent the thirdquarter update of the Automotive News/ PricewaterhouseCoopers Total Shareholder Return Index. The index is calculated separately for automakers, suppliers and retailers. Total shareholder return, considered the best indicator of shareholder value, shows the change in the value of an investment in a period. Each company on the Automotive News/PricewaterhouseCoopers Total Shareholder Return Index is measured using share price movement, stock splits or buybacks and reinvestment of any cash dividends. The calculation assumes all dividends are reinvested in additional stock. The index average is weighted by market capitalization — a company’s share price multiplied by shares outstanding — so the performance of companies with larger market caps has a greater impact on the index. A falling tide sinks all boats, and nearly every automaker, supplier and retailer in the Automotive News/PricewaterhouseCoopers Total Shareholder Return Index fell sharply in the third quarter. Worse is yet to come in the fourth quarter — maybe much worse — as the credit crunch hammers the nation’s economy. “Historically, automotive companies have been hit harder by moves in the economic cycle, and by credit cost or availability, than the economy at large,” said Paul McCarthy, automotive director of the PricewaterhouseCoopers strategy group. “The markets are moving so quickly at the moment that the results of this quarterly analysis do not and cannot reflect the current market reality for automotive shareholder value,” he said in an Oct. 17 analysis. On average, the index for automakers dropped 10.4 percent in the quarter and fell 28.2 percent for the 12-month period ending Sept. 30. Parts suppliers fell 18.1 percent in the quarter and 37.6 percent during the past 12 months. Auto retailers fared best, up 0.1 percent for the quarter. But as a group, retailers were down 40.2 percent over the past year. The index measures the value of a $100 investment over one quarter, one year and three years. The analysis is based on stock prices as of Sept. 30. Many automotive stocks plunged after Oct. 1 as the magnitude of the credit crunch became clear and corporations and consumers began to feel the pinch. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 VW Ford Toyota Hyundai TSR Index SAIC Honda GM Daimler AG Nissan Fiat BMW Suzuki Renault Tata Porsche Peugeot Mitsubishi Isuzu See our Web site for past total shareholder return stories. autonews.com THE BIG PICTURE Total shareholder return for automotive sectors; percentage change in the period Q3 2008 –18.1 –10.4 0.1 One year –37.6 –28.2 –40.2 Three years –7.9 13.8 –36.8 Global suppliers Global automakers U.S. retail groups cludes PricewaterhouseCoopers’ analysis. Bridgestone-Firestone Inc. came out on top of the third-quarter Shareholder Value Index, with a 20.8 percent improvement. Tire makers have benefited from an increase in the sale of higher-margin construction tires. Retailers hang in there The shareholder value index for publicly traded retailers was roughly flat for the third quarter. That’s an achievement, considering how poorly suppliers and automakers did. “It’s Econ 101; the retailers have a very variable cost base,” Roling said. “When you’re not selling cars, you’re not losing money — or, at least, you’re not losing as much money — to overhead.” Still, new-vehicle sales are the biggest source of revenues, even if margins are lower than other dealership profit centers. In addition, the credit freeze and the drop in leasing are bound to hurt another big source of profits, the finance and insurance department. On Oct. 10, Houston-based Group 1 Automotive Inc. warned that its fourth-quarter results would be lower than expected because of tighter consumer credit, lower dealership traffic and two disruptive hurricanes. With 100 stores, Group 1 is the nation’s fourth-largest dealer group. The biggest U.S. retailer, AutoNation Inc., of Fort Lauderdale, Fla., posted the biggest third-quarter improvement, up 11.0 percent. Group 1 was just behind with an improvement of 10.1 percent. In the auto industry, it’s hard to forecast earnings until the market bottoms out, said McCarthy of PricewaterhouseCoopers. “The markets need certainty in order to understand the future earnings potential … of automotive companies,” he said. “And certainty is a commodity that is in short supply.”c Worth, Fort Worth, Texas Deep downturn For the automotive sector overall, the latest drop was caused mostly by market conditions and not by the actions of individual companies, McCarthy said. “Cycles in the auto industry tend to be deeper than cycles in the general economy,” he said. The credit freeze came on top of the ongoing model-mix switch to more fuel-efficient cars and away from trucks. That trend has hit the Detroit 3 hard. But most damaging has been the overall drop in U.S. auto sales. U.S. light-vehicle sales plunged 26.6 percent in September. Through September, U.S. sales were down 12.8 percent to 10.8 million units. PricewaterhouseCoopers has cut its 2008 U.S. sales forecast to 13.0 million units, down from 13.6 million. The firm also has cut its 2009 U.S. light-vehicle forecast to only 12.8 million from 13.9 million. U.S. light-vehicle sales in 2007 were about 16.1 million. U.S. RETAIL GROUPS Total shareholder return for U.S. retail groups; percentage change in the period Q3 2008 1 2 3 4 5 6 7 AutoNation Group 1 Auto TSR Index CarMax Asbury Lithia Motors PAG Sonic Automotive 11.0 10.1 0.1 –0.5 –8.4 –9.4 –21.7 –33.7 One year –44.5 –33.8 –40.2 –30.3 –38.0 –73.0 –42.2 –63.6 Three years –52.6 –17.7 –36.8 –9.3 –24.7 –83.6 –27.3 –59.3 VW rallies In terms of shareholder value, the biggest exception in the third quarter was Volkswagen AG. Volkswagen was the target of a successful campaign by Porsche SE and Porsche CEO Wendelin Wiedeking to acquire a controlling share. With a purchase of an additional block of just under 5 percent of VW on Sept. 16, Porsche attained a controlling share of 35 percent of VW. Porsche’s goal is to increase its stake above 50 percent. Volkswagen rose 35.8 percent in the third quarter, but automakers as a group dropped an average of 10.4 percent, according to PricewaterhouseCoopers. In addition to the Porsche takeover drive, a Bloomberg report speculates that investors with “short” positions in VW stock may have inadvertently driven up the price when they were forced to buy shares to cover purchases they had made on credit, said Matt Roling, a PricewaterhouseCoopers consultant. A short position means an investor is betting a stock will go down. The investor borrows stock at a higher price, with the idea of replacing it later with stock purchased at a lower price and pocketing the difference. But if the shares go up, “shorts” that buy on credit can be forced to buy shares at the higher price. In turn, that can drive the shares even higher, Roling said. The other exception among automakers was Ford Motor Co. During the third quarter, Ford wavered above and below $5 per share. The company’s shareholder value index rose 8.1 percent for the quarter. But Ford shares dropped after Oct. 1, along with those of most other automakers. The same trends that have hobbled the automakers are hurting suppliers, too. Rising commodity prices and excessive dependence on slumping North American production have suppliers in a bind. “Suppliers that were once getting by may soon be heading to the auction block,” con- American Honda Finance Corp. Oct. 28 — ABC Minneapolis, Dayton, Minn.; ADESA Golden Gate, Tracy, Calif.; Manheim Orlando, Ocoee, Fla. Ind.; ADESA Kansas City, Lee’s Summit, Mo.; Manheim New England, North Dighton, Mass.; Manheim Arena Illinois, Bolingbrook, Ill.; Manheim Detroit, Carleton, Mich.; Manheim Orlando, Ocoee, Fla.; Manheim Philadelphia, Hatfield, Pa.; Manheim Riverside, Riverside, Calif.; Manheim St. Louis, Bridgeton, Mo.; ADESA Seattle, Auburn, Wash.; ADESA Golden Gate, Tracy, Calif. Ford Motor Co. Oct. 27 — Manheim Nashville, Mount Juliet, Tenn. Mercedes-Benz Financial Oct. 28 — Manheim Dallas Fort Worth, Fort Worth, Texas Subaru of A http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - October 27, 2008 Chrysler dealers under GM? States would rule Survey: Worried dealers flee GMAC Va. dealers turn to local credit unions Anxiety over Chrysler: Deal or no deal? Ford, GM execs join panels looking at eco-friendly options Big pickups, SUVs gain share Chrysler will cut 4,300 salaried jobs by year end BMW seeks joint vehicle electronics effort Runkle: Give tiny suppliers a chance VW goal: 80% N.A. content for Tenn. plant April Wortham China's BYD plans U.S. hybrids Lucky Icahn lost Lear Mahindra's U.S. launch to get $60 million ad drive Toyota may renew no-interest loans Hesterberg, Thomson will address congress Desperate industry begs feds for help Hyundai dealers want ads to pitch favorable loans Toyota, GM top global r&d spending After Detroit 3 take back design, supplier sitting pretty Germany's Preh supplies F-150 ventilation part Buehler is Volt supplier Freescale: New infotainment chip Are they too big to fail? A goal for GM: Buy back full control of GMAC Tax credit would move domestic cars GMAC loan bonus is a bad idea Take a good look: Toyota is losing its halo What flexibility is and what it isn't Toshiba joins battery battle Personnel Hyundai slows Ala. output of Sonata, Santa Fe Picture this LaNeve: GM marketing budget faces '09 hit Hyundai counts on luxury, hybrid hopes Keogh: Audi belongs with top luxury brands Dealers Court overturns class-action status in Blue Oval suit 2 major lemon-law lawyers lose right to practice in Md. Auctions offer more online for just-in-time dealers Used-truck prices higher in September Lack of used Minis limits certified program Wood trim maker expects to avoid worst of woes VW: U.S. may get Scirocco after all Ford's new F-150 is built for jobs, not jaunts Think of it as GPS for tools Feds look at China-made valves on Ford tires Shareholder value tumbles in 3rd quarter Shareholder value tumbles in 3rd quarter Ford truck marketing exec: Hybrid pickup 'publicity stunt' Survey: Ford Motor reliability improves Chrysler heir: Get back to basics Farley has bright idea to boost auction action Kerkorian speeds away from autos Names familiar? NADA leadership is a family affair Mitsubishi bucks trend on profits New trade debate in the works? Beware the 'vital' deal Automotive News - October 27, 2008 Automotive News - October 27, 2008 - (Page Intro) Automotive News - October 27, 2008 - (Page Bellyband1) Automotive News - October 27, 2008 - (Page Bellyband2) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 1) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 2) Automotive News - October 27, 2008 - Chrysler will cut 4,300 salaried jobs by year end (Page 3) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 4) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 5) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 6) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 7) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 8) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 9) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 10) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 11) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 12) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 13) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 14) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 15) Automotive News - October 27, 2008 - Hyundai slows Ala. output of Sonata, Santa Fe (Page 16) Automotive News - October 27, 2008 - Picture this (Page 17) Automotive News - October 27, 2008 - Picture this (Page 18) Automotive News - October 27, 2008 - Picture this (Page 19) Automotive News - October 27, 2008 - LaNeve: GM marketing budget faces '09 hit (Page 20) Automotive News - October 27, 2008 - Hyundai counts on luxury, hybrid hopes (Page 21) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 22) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 23) Automotive News - October 27, 2008 - Dealers (Page 24) Automotive News - October 27, 2008 - 2 major lemon-law lawyers lose right to practice in Md. (Page 25) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 26) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 27) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 28) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 29) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 30) Automotive News - October 27, 2008 - VW: U.S. may get Scirocco after all (Page 31) Automotive News - October 27, 2008 - Feds look at China-made valves on Ford tires (Page 32) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 33) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 34) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 35) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 36) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 37) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 38) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 39) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 40)
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