The other was to have bought Fiat shares, which would have been hugely counter-intuitive. All that Fiat had to gamble on was a new chief executive, Sergio Marchionne, who had no previous experience of the auto industry. Given the number of times that the Italian company has forecast a financial recovery, the punt was only for the brave.
In the end, the race for the 2006 title was won by Lookers, buoyed by Pendragon’s bid, and more strong results. It was just one point ahead of Fiat at a 94% gain for the year.
Fiat may be the best investment this year. Marchionne has tackled redundancies, new products and disposals, and is forecasting operating margins unheard of in the European volume car industry. The proposition is so out of line with history that analysts cannot yet recommend chasing the shares any further.
VW (82%) and Porsche (53%) came third and fourth in the table on the old principle that one plus one can be made to equal three. Porsche has had fabulous sales growth, was awash with cash, and bought into VW.
European Motor Holdings (51%) was a good bet the day that chief executive Richard Palmer announced that Goldman Sachs had been appointed to “review options”. The conclusion was to sell and Inchcape (7th at 34%) dutifully obliged.
Renault (6th, 35%) was the highest-placed company to benefit from corporate performance alone. It is still driven by the huge benefits obtained by chief executive Carlos Ghosn’s partnership with Nissan.
Also in the top 10 were the minute HR Owen (18%) and the mighty Toyota (18%) whose US market share gain of 13% was its 11th in a row.
At one point, HR Owen investors were looking at an 80% gain. That was the day CEO Nick Lancaster announced he was looking to take the group private. Then in November he announced he wouldn’t, and the shares slumped to a modest 18% improvement.