VroomVroom
Autotechnik Ace
Found this on Msn cars..
When walking my dog in Kensington streets I have in the past amused myself by counting the number of Mercedes-Benz and BMW cars in the streets.
My highest figure on a short walk was around 42 - and that didn't include Minis, now owned by BMW. Like much of the rest of the world, except the French who are stuck with their Citroens, Peugeots and Renaults, we love German cars.
However I never expected German car makers to become hot stock market properties. I imagined the industry was too mature and competitive and that Germany was stuck with high cost production making it hard to make decent profits. It seems I was wrong.
Analysts believe gains of 25% are on the cards
Shares in German car makers are on fire. Shares in Volkswagen have risen 2.4-fold from their low point in the last year and are up more than five-fold in the last two and a half years.
Stockbrokers, WestLB, think there are more gains to come with a share price target of €200 against the latest price of €158.7. One reason is the group's programme to increase productivity by 10% a year.
Another might be group plans to become the world's largest car maker by 2014-15 with 12 new models to be launched in the next three years and ambitious expansion plans in the US, Russia and India. It also plans to be more profitable than rival Toyota.
Costs fall while sales to emerging countries rise
A broad reason for the good performance lies in an analysis by Goldman Sachs. They say European car makers generally are benefiting from restructuring with new costs structures being implemented with every new product launch. They are also enjoying new sources of demand in emerging markets.
China is already the world's second largest market for Rolls-Royce, so it is easy to imagine how demand for German-made cars could ramp up in countries like China, India, Russia, the Middle East and central Europe as their economic booms creating widening pools of seriously affluent consumers. Volkswagen sales rose 12% in August led by growth in China.
There are also corporate goings-on. In a classic David and Goliath battle niche car maker, Porsche, is trying to take control of Volkswagen. So far Porsche has acquired 31% of Volkswagen and, subject to rulings from the European Court of Justice, has plans to take that stake to 51%.
Porsche shares up 75-fold since 1992
Its ability to do this is helped by Porsche's amazing performance in recent years. Since 1992, the date of the last serious world recession, the shares have risen 75-fold. This has made the dominant Piech family one of the richest in Germany.
Ferdinand Piech is also chairman of Volkswagen. Porsche is super profitable. This year's profits are expected to top last year's €2.1 billion. This is more than Volkswagen's profits last year, albeit that those profits have nearly tripled in two years.
The difference is that Volkswagen makes its money from selling six million cars, Porsche worldwide sales are less than 100,000. Porsche has come a long way. It was making losses in the early 1990s. It is also well placed to benefit from emerging markets. Russian sales doubled last year but the company is barely scratching the surface of the potential as the economies continue to grow.
All the German car groups look like good buys
DaimlerChrysler, the maker of Mercedes-Benz, is also having an exciting time. Like Volkswagen it is increasing productivity by 10 per cent a year and plans to continue that process helped by job cuts.
In October, the name will change back to Daimler AG after the August sale of the loss-making Chrysler. The shares have more than doubled since early 2005. There have even been rumours that rival luxury car giant, BMW, is thinking of taking a stake.
BMW shares have been solid long-term performers rising around 10-fold since the early 1990s. All the German car groups look brilliant against US car giant, General Motors. The latter's shares have made minimal progress in the last quarter century.
High time to buy into German car makers? - Investing | More commentary - MSN Money UK
When walking my dog in Kensington streets I have in the past amused myself by counting the number of Mercedes-Benz and BMW cars in the streets.
My highest figure on a short walk was around 42 - and that didn't include Minis, now owned by BMW. Like much of the rest of the world, except the French who are stuck with their Citroens, Peugeots and Renaults, we love German cars.
However I never expected German car makers to become hot stock market properties. I imagined the industry was too mature and competitive and that Germany was stuck with high cost production making it hard to make decent profits. It seems I was wrong.
Analysts believe gains of 25% are on the cards
Shares in German car makers are on fire. Shares in Volkswagen have risen 2.4-fold from their low point in the last year and are up more than five-fold in the last two and a half years.
Stockbrokers, WestLB, think there are more gains to come with a share price target of €200 against the latest price of €158.7. One reason is the group's programme to increase productivity by 10% a year.
Another might be group plans to become the world's largest car maker by 2014-15 with 12 new models to be launched in the next three years and ambitious expansion plans in the US, Russia and India. It also plans to be more profitable than rival Toyota.
Costs fall while sales to emerging countries rise
A broad reason for the good performance lies in an analysis by Goldman Sachs. They say European car makers generally are benefiting from restructuring with new costs structures being implemented with every new product launch. They are also enjoying new sources of demand in emerging markets.
China is already the world's second largest market for Rolls-Royce, so it is easy to imagine how demand for German-made cars could ramp up in countries like China, India, Russia, the Middle East and central Europe as their economic booms creating widening pools of seriously affluent consumers. Volkswagen sales rose 12% in August led by growth in China.
There are also corporate goings-on. In a classic David and Goliath battle niche car maker, Porsche, is trying to take control of Volkswagen. So far Porsche has acquired 31% of Volkswagen and, subject to rulings from the European Court of Justice, has plans to take that stake to 51%.
Porsche shares up 75-fold since 1992
Its ability to do this is helped by Porsche's amazing performance in recent years. Since 1992, the date of the last serious world recession, the shares have risen 75-fold. This has made the dominant Piech family one of the richest in Germany.
Ferdinand Piech is also chairman of Volkswagen. Porsche is super profitable. This year's profits are expected to top last year's €2.1 billion. This is more than Volkswagen's profits last year, albeit that those profits have nearly tripled in two years.
The difference is that Volkswagen makes its money from selling six million cars, Porsche worldwide sales are less than 100,000. Porsche has come a long way. It was making losses in the early 1990s. It is also well placed to benefit from emerging markets. Russian sales doubled last year but the company is barely scratching the surface of the potential as the economies continue to grow.
All the German car groups look like good buys
DaimlerChrysler, the maker of Mercedes-Benz, is also having an exciting time. Like Volkswagen it is increasing productivity by 10 per cent a year and plans to continue that process helped by job cuts.
In October, the name will change back to Daimler AG after the August sale of the loss-making Chrysler. The shares have more than doubled since early 2005. There have even been rumours that rival luxury car giant, BMW, is thinking of taking a stake.
BMW shares have been solid long-term performers rising around 10-fold since the early 1990s. All the German car groups look brilliant against US car giant, General Motors. The latter's shares have made minimal progress in the last quarter century.
High time to buy into German car makers? - Investing | More commentary - MSN Money UK
