Prudential: Subaru Gone - Suzuki/Isuzu Could Be Next

[Perian]

Link: http://www.forbes.com/markets/2005/1...rtner=yahootix

Prudential Equity Group maintained a "neutral weight" rating on General Motors after the auto giant announced the sale of its 20% stake in Fuji Heavy Industries, the maker of Subaru, for about $730 million.

The research house said the move was "a mild positive for the stock as it suggests that further disposals may be pending."

Prudential said a divestiture of Suzuki and Isuzu may be in the works.

"While the company maintained that it has no plans to exit its relationships with Suzuki and Isuzu, we see little rationale for continuing with them and would view the FHI disposal as a mildly positive catalyst," it said.

[surferdude00711]

I say they sellem; waste of money. And brands are going no where soon.

[Perian]

I look forward to seeing a "midly positive catalyst" take place.

[gmsickofan]

As long as the GM-Suzuki-GMDaewoo cooperation doesn't sour, I also can't see why selling off the Suzuki stake would matter. GM is not taking advantage of any Suzuki vehicles as far as I can tell, aside from the WagonR/Agila and Cruze. Suzuki is sharing the 3.6LDOHC engine, but GM sources a Honda engine so that's no reason to keep an alliance.

GM Daewoo produces much better results than Isuzu, Subaru and Suzuki combined for GM.

GM Daewoo is an eager partner, willing to go at all markets with big brother GM, unlike reluctant Subaru, and distant Suzuki and Isuzu.

[surferdude00711]

Daewoo I'd keep, just not in USA markey. Isuzu is dumped first, Suzuki when they don't make a comeback of any sort.

[kenman923]

I would agree that GM should dump Isuzu. They may benefit with an alliance from Suzuki. With the GM/Daewoo merger, I wonder why they don't return the Daewoo dealer network to the United States.

[camaro chris]

Originally Posted by surferdude00711

I say they sellem; waste of money. And brands are going no where soon.

yeah i agree with you, you should tell bob and rick when you meet em!

[mbukukanyau]

Isuzu is going nowhere, the Truck business is big.. GM will not let go... Alliance goes back to the 60's too if not earlier..
Remember the LUV pick up?

[SCCA1995]

Originally Posted by mbukukanyau

Isuzu is going nowhere, the Truck business is big.. GM will not let go... Alliance goes back to the 60's too if not earlier..
Remember the LUV pick up?

To add to that, Isuzu did a lot of engineering for the Colorado/Canyon trucks. I think Isuzu got too involved on that platform.

[minnfang]

I'm OK with dumping Subaru and Suzuki but am not sure about Isuzu just yet. Isn't Isuzu GM's diesel lifeline? It's now that GM really needs the Duramax with the gas price situation. Does GM have a decent in-house diesel program? I'd love to see a nice in-line six turbo diesel available in the new Silverado and Tahoe. Something about 4.5 litres that got 25-27 MPG on the highway. Something with decent power for the average guy that wasn't a $6K option.

[cfch3399]

Good, get rid of all that stuff. Maybe without Isuzu messing around, the next-gen Colorado/Canyon will actually be able to compete with other small trucks.

[pkd87]

Isuzu I would dump, Suzuki would keep they are doing very well here in the US due to GM Daewoo which i would also keep because they are doing very well globaly and GM just baught daewoo like 4 years ago so why sell?

[SonicAerio]

Originally Posted by gmsickofan

As long as the GM-Suzuki-GMDaewoo cooperation doesn't sour, I also can't see why selling off the Suzuki stake would matter. GM is not taking advantage of any Suzuki vehicles as far as I can tell, aside from the WagonR/Agila and Cruze. Suzuki is sharing the 3.6LDOHC engine, but GM sources a Honda engine so that's no reason to keep an alliance.

GM Daewoo produces much better results than Isuzu, Subaru and Suzuki combined for GM.

GM Daewoo is an eager partner, willing to go at all markets with big brother GM, unlike reluctant Subaru, and distant Suzuki and Isuzu.

There's one difference though.....GM DAT is 50% owned by Gm and GM has controlling intrest where GM holds 20% or less of Suzuki or Isuzu

Yes it seem right now GM might have to do whatever it needs to secure funds and selling partial stakes in companies that don't effect GM as much...out of the three alliances....

*Subaru was most distant only providing the 9-2

*Isuzu was heavily responsible for design of the Colorado/Canyon and of course Duramax diesels.

*Suzuki not only has a partnership on the GM DAT cars but also helped design the 3.6 and co-partnership of the Cruze.....not to mention jointly own the CAMI plant - Suzuki supplied the Tracker now GMs turn to supply Suzuki their platform(Theta - for XL-7). They also are close partners on fuel cell and have been working on that for years before DCX or BMW jumped on. Suzuki also is GM's gateway to Japan and is responsible for selling GMs there and for getting GM past Japanese bureaucracy......Finally not only does GM own stake in Suzuki, but Suzuki owns stake(although small) in GM.

If anything....I could see Isuzu next on the chopping block, then possibly Suzuki, but Suzuki is actually doing better in NA and they are like # 6 or 7 in the world sales wise...they are even expanding dealerships.....Plus Suzuki is GM's windo for selling GMDAT vehicles in the states....which over adds to GM global sales

Overall....to speak the truth..if GM is trying to cut back or lower production....I could even see them cutting losses in brands like Buick in NA or sellig Saab before axing Suzuki. GM does nothing but make money and better technology with Suzuki it would be stupid to end this alliance....

[rueben44]

Keep Suzuki becuase that is GM's in roads into Japan. They actually should buy about 1 or 2% more so that they would have control. Daewoo is the best thing to happen to GM in a long time it is going no where. Let the others go they are not doing much.

[LI CADILLAC]

Originally Posted by Perian

Link: http://www.forbes.com/markets/2005/1...rtner=yahootix

Prudential Equity Group maintained a "neutral weight" rating on General Motors after the auto giant announced the sale of its 20% stake in Fuji Heavy Industries, the maker of Subaru, for about $730 million.

The research house said the move was "a mild positive for the stock as it suggests that further disposals may be pending."

Prudential said a divestiture of Suzuki and Isuzu may be in the works.

"While the company maintained that it has no plans to exit its relationships with Suzuki and Isuzu, we see little rationale for continuing with them and would view the FHI disposal as a mildly positive catalyst," it said.

Good, get rid of them all!!!!!!!!!!!!!!!!!