First Time in History Fiat has Led GM in Market Value
It's a mad, mad, mad world, highlighted by recent news that the market value of Europe's basket case automaker Fiat has just surpassed
that of General Motors, the world's largest automaker, according to the Financial Times. How did that happen?
GM is only number one based on number of vehicles sold, not profitability - that last honour held by Toyota or Porsche, depending on if you're looking at overall profitability or on a gross margin basis, respectively. Fiat, on the other hand, seemed on the brink of bankruptcy only last year, just prior to receiving a cash infusion of about $2.40 billion USD ($2.78 billion CAD) from GM, a settlement that came as a result of a put option orchestrated by ex-GM CEO Jack Smith. It bought back Maserati from Ferrari, aligned its operations with
the Alfa Romeo brand, and recommitted to returning the storied marque to North America without naming an exact date - probably sometime in 2008.
But while sales of some of its variously branded models are up this year, Fiat's most impressive coup has been to restore confidence among investors. The Italian automaker has seen better times in the past for sure, but compared to GM's current crisis it is riding high.
Fiat is now worth E10.7 billion, or $12.87 billion USD ($14.92 billion CAD), compared to General Motors' $12.67 billion USD ($14.69 billion CAD). While the margin is only slight, it marks the first time in history Fiat has surpassed GM in market value, and by so doing, brings to light that Fiat may not be the last to do so.
It's a mad, mad, mad world, highlighted by recent news that the market value of Europe's basket case automaker Fiat has just surpassed
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| The market value of Europe's once basket case automaker Fiat, maker of the beautiful Alfa Romeo Brera, has just surpassed that of General Motors. (Photo: Alfa Romeo) |
GM is only number one based on number of vehicles sold, not profitability - that last honour held by Toyota or Porsche, depending on if you're looking at overall profitability or on a gross margin basis, respectively. Fiat, on the other hand, seemed on the brink of bankruptcy only last year, just prior to receiving a cash infusion of about $2.40 billion USD ($2.78 billion CAD) from GM, a settlement that came as a result of a put option orchestrated by ex-GM CEO Jack Smith. It bought back Maserati from Ferrari, aligned its operations with
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| Fiat, which also owns sport/luxury nameplate Lancia, is now worth E10.7 billion, or $12.87 billion USD, compared to General Motors' $12.67 billion USD. (Photo: Lancia) |
But while sales of some of its variously branded models are up this year, Fiat's most impressive coup has been to restore confidence among investors. The Italian automaker has seen better times in the past for sure, but compared to GM's current crisis it is riding high.
Fiat is now worth E10.7 billion, or $12.87 billion USD ($14.92 billion CAD), compared to General Motors' $12.67 billion USD ($14.69 billion CAD). While the margin is only slight, it marks the first time in history Fiat has surpassed GM in market value, and by so doing, brings to light that Fiat may not be the last to do so.