Car Maker Share Prices in 2009 and beyond

The link between sales performance and share price is well known on the High Street. Tesco’s share price dropped  2.4% in December 2009, because their Q3 2009 sales were at the lower end of expectations, and rose 2.7%  in mid-January after publishing a good trading update. While supermarkets (daily consumables) aren’t the same as car makers (cyclical discretionary purchases) are their share prices driven by similar issues? On the UK market over the last 12 months they fared very differently. Food and Drug Retailers gained 17% while cars and parts makers jumped 108%. But, on a global scale, are car maker’s share prices the result of fundamentals or other factors?

Read more

UK Car Market to December 2009

The UK New Car Market fell 6% in 2009. No surprise there: GDP was down over 4% and consumers continued to shy away from spending towards saving. But for the 1.9MN who did venture into the market, what made the biggest difference? Why did the winneres win and the losers lose? Other than new models, the most importatnt differentiator was exchange rates versus Sterling. If a manufacturer could avoid producing or buying parts from high value currency areas like the Yen, US dollar or Euro, they almost certainly attracted buyers and vice versa. So Nissan who make cars in the UK (weak £) and could use Renault to substitute EU parts for even more expensive japanese ones did well. The runaway winners were Hyundai and Kia who had every advantage imaginable: scale economies, the UK Scrappage Scheme and a weak Korean Won. If this scenario keeps up, they’ll probably enjoy a bumper 2010 as well!

Read more

Is the shine coming off Pendragon’s SP?

At the start of 2009, the Pendragon share price languished between 2p to 5p. For those who bought at the bottom, they experienced a spectacular rise to around 45p. But, it may be all over for the present time. The share has been drifting slowly downward since August and now seems stuck in the 30p – 40p range. Many small investors seem to think that unless their are changes on the Pendragon Main Board – or the full year results are exceptional and the dividend is reinstated – that is where the price is stuck for the time being.

Read more