Blog: Dave LeggettToday's auto financials: the good, the bad and the ugly

Dave Leggett | 25 January 2007

The end-year '06 financial results are coming in now. There are three important ones in today and I just noticed that they can be neatly summarised in the three words that formed the title of Sergio Leone's Spaghetti Western (a slight misnomer as the series of films starring Clint Eastwood were actually filmed in Spain), 'The Good, the Bad and the Ugly'.

The good? Fiat Auto. Fiat is now in the black and its 2006 results exceeded expectations ensuring that Marchionne goes out on a high (as CEO of Fiat Auto that is, he still has the Fiat Group top dog job) this year. 2007 may be harder work, but 2006 was a good job on the back of some strong selling models - most notably the Grande Punto. Can Fiat Auto maintain momentum this year with the Fiat Bravo (which faces very stiff competition in Europe's C-segment)?

The bad? Hyundai Motor. A slump in profits is not a disaster, but Hyundai is no longer looking quite as attractive as it did until recently. It's taking an exchange rate hammering, but has also had quality problems in China that have weakened sales there. Industrial relations problems in Korea don't help either.

The ugly? Ford. It wasn't exactly unexpected and an oil tanker takes time to turn, but it's hard to be positive about losing over a billion dollars a month last year. Yes, Mulally still has a job on. One upside going forward: things can only get better as costs of restructuring fall away and Ford is left with a lower cost base in North America.

PS: If you have a few mins spare and enjoyed the Spaghetti Westerns with good ol' Clint, Lee van Cleef and the rest of the gang, this wikipedia page is worth a look . Good heavens, there's a 'Roast Beef Western'!


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