Porsche’s big break finally came true, new car sales trends continue to puzzle the top minds paid to predict them and Southeast Asia might just be on the brink of an electric vehicle explosion. All that and more in for Thursday, September 29, 2022.

After more than a year of teases and false starts, Volkswagen spun Porsche AG off at last on Thursday morning to the tune of $72 billion, or 75 billion euros. Shares were issued at 82.50 euros, and, as tells it, the company gained three percent on the day, edging close to Volkswagen’s total capitalization. Some VW investors actually jumped ship to Porsche.

That lifted Porsche AG’s valuation to 77.4 billion euros, close to the market capitalisation of Volkswagen as a whole, which is worth about 80.1 billion euros, and ahead of rivals such as Ferrari. It is Germany’s biggest listing since Deutsche Telekom in 1996.

Oliver Blume, in a Reuters interview, brushed aside concerns about his dual role as CEO of both Porsche AG and Volkswagen, saying the decision was made “very consciously”.

Porsche AG’s strong start came despite broadly weaker stock markets after red-hot German inflation data. Shares in Volkswagen and holding company Porsche SE, which owns a blocking minority in Porsche AG, were down 4.6% and 8% respectively as investors switched across.

“This is not exactly a dream environment for an IPO today,” said QC Partners wealth manager Thomas Altmann.

Indeed, this has not been a great year to make your stock market debut, which is precisely why Volkswagen has had to delay its plans for so long. Remember: in the beginning of 2022, when the euro was still stronger than the dollar, . That said, one banker quoted anonymously in Reuters’ story seemed confident this wasn’t going to open the floodgates for IPOs. Porsche is not most IPOs.

One more thing: You can be sure the Porsche and Piech families are high-fiving all around today, as it’s been more than a decade since their bid to swallow up Volkswagen failed and they lost their grip over the Porsche brand. has a rather confusing graphic that explains Porsche’s pre- and post-IPO relationship with Volkswagen. It’s not the artist’s fault — this stuff is excessively convoluted. But the gist is that for the first time in a long time, the families will get their say in the automaker that trades on their name:

The new setup will give the family the power to veto major strategic decisions at Porsche; since the takeover by VW, the brand has sometimes had to go along with moves that ended up being against its interests, such as a plan to build EVs with Audi at a plant in Hanover. Still, the two companies will remain closely linked to one another — and to the German state of Lower Saxony, another major VW shareholder and home to VW’s largest factory.

2nd Gear: Nobody Knows What’s Going on With New Car Sales

Yesterday, that this September would mark a banner September for new car sales. It all seemed very promising, if you happen to run a car company. “Transaction prices still rose and consumers spent more money on new vehicles this month,” J.D. Power’s data and analytics president Thomas King said, paying no mind to the rising interest rate.

However, not everyone’s convinced the picture will be that rosy. Take Cox Automotive, for example. Courtesy :

Charlie Chesbrough, Cox Automotive senior economist, said COVID-related production disruptions and the war in Ukraine scuttled the anticipated improvement in inventories at the start of the year.

Now the industry faces a new wrinkle.

“It seems likely that much of the pent-up demand from limited supply is quickly disappearing as high interest rates eat away at vehicle buyers’ willingness and ability to purchase,” Chesbrough said.

S&P Global Mobility analysts expect U.S. light-vehicle sales to be limited to 1.1 million units this month, with the seasonally adjusted annualized rate set to come in at 13.4 million, up from 12.38 million in September 2021, but well below the 15 million sales level the industry considers ideal and the 17 million sales set from 2015 to 2019.

Supply is at least easing up, but let’s not get carried away:

The firm said new-vehicle inventory jumped 41 percent — or nearly 350,000 vehicles — from last year’s record low. Days’ supply, meanwhile, is up about 50 percent over the period.

Even so, Chesbrough tempers expectations about a full-scale recovery.

“We’re in a long-term trajectory [where] ... inventories are going to slowly rebuild,” he said. “But no one is expecting a surge of vehicles being shipped around the country ... and getting us back to a 60- or 90-day supply.”

Much like with the chip shortage, anyone who tells you they know how this is going to play out and particularly when are getting a little ahead of themselves, to put it conservatively.

3rd Gear: Rising Energy Prices Stall UK Car Market

As energy costs spiral in the U.K., carmakers have had to raise prices while curbing plans, according to Bloomberg via :

UK automakers have seen energy costs jump by about £100 million ($109 million) this year, or 50 percent, fueling concerns among a majority of manufacturers over the future of their operations, a survey by the Society of Motor Manufacturers and Traders found.

The higher energy bills have led nine in 10 automakers to pass on rising costs to customers, while many have delayed or canceled major investments.

UK auto output rose for a fourth consecutive month in August, though production remained 46 percent below pre-pandemic levels, the SMMT said Thursday.

“While another month of rising UK car production is good news, and testament to sectoral efforts to overcome supply chain shortages, it overshadows what is an extremely tough and uncertain environment,” said Mike Hawes, SMMT’s CEO.

“Volumes are down dramatically and firms are having to take drastic steps to safeguard their businesses in the face of myriad challenges.”

Output has picked up slightly since its lows in the early months of 2022, but there is still a very long way to go to match pre-pandemic levels. For what its worth, the portion of cars built that are battery-electric, plug-in hybrid or hybrid has boomed, comprising roughly a third of all cars made in the U.K. in August, per .

4th Gear: Toyota Has Good News

Global production for the world’s biggest automaker surged in August, up 44.3 percent compared to the same period last year, per :

Vehicle production soared 44.3% in August year-on-year, the first increase since March. The world’s largest automaker by sales produced 766,683 vehicles worldwide last month, above its target of around 700,000 and above year-ago output of 531,448.

Output increased mainly overseas, with domestic production up 5.6% year-on-year and overseas production jumping by 65.1% from a year ago, also a record rise for the month of August.

Toyota also managed to squirrel away more silicon than it had expected, which allowed all of these encouraging numbers to happen. It’s a very different story than the as of late about Toyota in The Morning Shift.

5th Gear: Southeast Asia’s EV Boom Is Coming

A lack of government support and environmental regulations, along with the popularity of generally smaller, cheaper cars, has kept Southeast Asia largely sequestered from the global electric vehicle push. That could start to change very soon, according to :

Chinese automakers have several affordable EV models that they manufacture and sell in China, and they’re beginning to bring many of these to Southeast Asia. Great Wall Motor and SAIC’s MG Motor have introduced three EVs in Thailand that are priced between $20,000 and $30,000. Wuling, another Chinese automaker known at home for its very successful Hongguang Mini EV, introduced a small EV priced from $16,000 in Indonesia. Many of these models are already popular among consumers and have long wait times for delivery.

The geopolitical tension between China and some Western economies also makes Southeast Asia a relatively more attractive overseas manufacturing hub for Chinese automakers looking to expand abroad. The incentives from Southeast Asian governments for companies investing in local manufacturing of EVs and lithium batteries sweeten the deal, leading to a flurry of investments from China and Korea into the region. Automakers from these countries including BYD, Great Wall Motor, Hyundai, MG Motor and Wuling have chosen either Indonesia or Thailand as their regional manufacturing base for EVs in the region.

Economies of scale are also starting to come around to make affordable EVs more realistic, attracting everyone from the biggest players, like Toyota, Hyundai and BYD, to upstarts such as Vinfast, to the region. It’s going to be an interesting spot to watch over the coming years.

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Neutral: Almost Any Other Car Would Be More Useful

As I teased in , I’m moving this weekend. Fortunately I have a U-Haul reserved and family with their own vehicles ready to assist, but I think it’s funny how useless my Fiesta ST is for carrying anything. It’s tall-ish, but the profound narrowness just makes it a non-starter for more than like, four reasonably sized boxes. I actually think a GR86 or BRZ would be more helpful. The Fiesta masquerades as something practical — don’t be fooled!