The much-anticipated alliance announcement by Volkswagen and Ford Motor left investors feeling let down as it lacked a big-bucks plan to join forces on electric vehicles and self-driving cars.
Wall Street was hoping for a blockbuster deal, such as the billions of dollars General Motors landed for its self-driving unit from Honda and SoftBank Vision Fund last year. There also was some belief Ford would tap into VW’s massive electric-vehicle development programme, so the companies could jointly take on Tesla’s dominance of that segment.
Instead, VW and Ford merely said they are committed to exploring those areas, and formalised co-operation on commercial vehicles - a project the two companies announced they would pursue seven months ago. The payoff from joining forces to develop trucks and vans will not be peanuts: Ford sees the tie-up adding $500 million (Dh1.83 billion) to its annual pre-tax profit. But that benefit won’t be felt until 2023.
“This is a toe-in-the-water kind of deal,” said Jeff Schuster, senior vice president of forecasting for researcher LMC Automotive. “It really wasn’t much of an announcement, frankly. There’s nothing beyond what was already anticipated.”
Volkswagen shares closed up just 0.3 per cent Tuesday, while Ford fell 1.7 per cent. Both entered the year looking for a lift after their stocks dropped about 17 per cent and 39 per cent last year, respectively.
The commercial-vehicle alliance may do more for VW than Ford, as it fills two weaknesses in the German car maker’s commercial line-up – pickups and delivery vans – that are already areas of strength for Ford, Jefferies analyst Philippe Houchois wrote to investors. The market continues to wait for more from Ford on how it’s going to improve its fortunes.
“Ford keeps frustrating investors by delivering piecemeal information on its future plans,” Mr Houchois said in a note. He recommends buying the shares and has an $11 price target.
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Chief executive Jim Hackett has been disappointed right alongside Ford investors. On the floor of this week’s North American International Auto Show in Detroit, Mr Hackett told Bloomberg Television he’s not happy about how Ford performed in 2018.
Wall Street would like to see a more detailed plan from Ford on its path forward, said David Kudla, the chief executive officer of Mainstay Capital Management in Grand Blanc, Michigan. Whereas GM’s chief executive Mary Barra has been articulating a clear vision and comprehensive strategy, “we haven’t seen that from Jim Hackett”, he said.
Ford executive chairman Bill Ford elevated Mr Hackett, 63, to chief executive in May 2017 and gave him a mandate to speed up decision-making. In his own interview, the great-grandson of founder Henry Ford estimated the company is in the third or fourth inning of transforming itself for the demise of the internal combustion engine or the driver at the wheel.
“The problem is, there’s never a ninth inning because this business keeps reinventing itself,” Mr Ford said Monday.
“If my great grandfather were to parachute in to our business 10 years ago, it would have looked very familiar to him - even five years ago,” he said. “Now, we’re looking at everything being disrupted.”
Charting that future has been challenging as automakers attempt to control their own destiny while seeking to share the burden of tens of billions in costs required to develop self-driving cars and electric vehicles. VW has committed $50bn to its electric vehicle programme, while Ford is investing a combined $15bn on battery-powered cars and driverless cars.
Volkswagen chief executive Herbert Diess said on Monday that his company is committed to owning the software stack that controls self-driving cars, and that joining forces with Ford in that regard has not been decided.
“They want to control it,” Schuster said of mR Diess’s desire for Volkswagen. “And that doesn’t play well in an alliance.”
GOODBYE%20JULIA
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RESULT
Leeds United 1 Manchester City 1
Leeds: Rodrigo (59')
Man City: Sterling (17')
Man of the Match: Rodrigo Moreno (Leeds)
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
How the bonus system works
The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.
The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.
There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).
All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.
BIO
Favourite holiday destination: Turkey - because the government look after animals so well there.
Favourite film: I love scary movies. I have so many favourites but The Ring stands out.
Favourite book: The Lord of the Rings. I didn’t like the movies but I loved the books.
Favourite colour: Black.
Favourite music: Hard rock. I actually also perform as a rock DJ in Dubai.
The%C2%A0specs%20
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COMPANY%20PROFILE
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Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
More from Neighbourhood Watch
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
'Munich: The Edge of War'
Director: Christian Schwochow
Starring: George MacKay, Jannis Niewohner, Jeremy Irons
Rating: 3/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Day 2, Abu Dhabi Test: At a glance
Moment of the day Dinesh Chandimal has inherited a challenging job, after being made Sri Lanka’s Test captain. He responded in perfect fashion, with an easy-natured century against Pakistan. He brought up three figures with a majestic cover drive, which he just stood and admired.
Stat of the day – 33 It took 33 balls for Dilruwan Perera to get off the mark. His time on zero was eventful enough. The Sri Lankan No 7 was given out LBW twice, but managed to have both decisions overturned on review. The TV replays showed both times that he had inside edged the ball onto his pad.
The verdict In the two previous times these two sides have met in Abu Dhabi, the Tests have been drawn. The docile nature of proceedings so far makes that the likely outcome again this time, but both sides will be harbouring thoughts that they can force their way into a winning position.
The specs
Engine: Turbocharged four-cylinder 2.7-litre
Power: 325hp
Torque: 500Nm
Transmission: 10-speed automatic
Price: From Dh189,700
On sale: now
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
SERIES INFO
Afghanistan v Zimbabwe, Abu Dhabi Sunshine Series
All matches at the Zayed Cricket Stadium, Abu Dhabi
Test series
1st Test: Zimbabwe beat Afghanistan by 10 wickets
2nd Test: Wednesday, 10 March – Sunday, 14 March
Play starts at 9.30am
T20 series
1st T20I: Wednesday, 17 March
2nd T20I: Friday, 19 March
3rd T20I: Saturday, 20 March
TV
Supporters in the UAE can watch the matches on the Rabbithole channel on YouTube
