The market value of Italy’s Fiat, long regarded as the basket case of the European motor industry, has passed General Motors, the world’s biggest carmaker by number of vehicles sold, for the first time on record, according to the Financial Times.
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The financial newspaper noted that the shift demonstrates both the scale of the crisis at GM and the rapid return of investor confidence in Fiat – just two-and-a-half years ago GM was worth more than seven times as much as Fiat and was expected to buy the Italian company’s car-making division but Fiat is now worth EUR10.7bn, or US$12.87bn, against GM’s $12.67bn.
But the FT stressed that GM continues to be far bigger than Fiat in operating terms, employing 325,000 people and making 8.2m cars and trucks last year, against Fiat’s 160,549 workers and 1.77m vehicles.
“The US automotive business model has continued to frighten investors while Fiat has managed to show significant operational improvement and also massively bolstered its balance sheet,” said, Citigroup motor analyst John Lawson told the Financial Times, adding: “Ironically that’s partly come from GM.”
The paper said that the fortunes of the two companies were closely tied until February, when GM paid Fiat EUR1.55bn to avoid having to buy Fiat Auto, and surrendered its 10% stake in the loss-making car division.
It gained half a factory in Poland and access to some advanced diesel engines in return, the Financial Times said.
