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08.25.2008 1:56 pm
Foreign carmakers have destroyed wealth, too
David Nicklaus
St. Louis Post-Dispatch

We all know that Ford and General Motors have fallen on hard times, with their stock prices down 45 and 67 percent respectively in the past year. Now Antony Currie at BreakingViews.com points out that the American automakers aren’t alone in destroying shareholder wealth. In fact, in absolute value, Toyota’s market capitalization has fallen by twice as much as GM’s, and Daimler’s three times as much.

Currie continues with the comparison:

Add on the declines at BMW, Fiat and Renault and the industry incinerated $180bn of market value since shares hit their highs between July and October last year – that’s six times more than the combined drop at Ford and GM. Throw in Peugot’s drop and the non-US automotive group’s decline hits $190bn.

Of course, GM’s and Ford’s shares have been beaten down for years. In dollar terms, they simply didn’t have much left to lose. In percentage terms, the U.S. companies are the value-destruction champs, but there’s plenty of pain to go around: Toyota is down 26 percent in the past year, BMW has fallen 36 percent and Daimler is off 31 percent.

Honda, which Currie doesn’t mention, is a relative standout: Its Tokyo-listed shares are down just 3 percent in the past year.


Article printed from Mound City Money: http://www.stltoday.com/blogzone/mound-city-money

URL to article: http://www.stltoday.com/blogzone/mound-city-money/mound-city-money/2008/08/foreign-carmakers-have-destroyed-wealth-too/

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