Companies Focus – Global 11 Auto-makers – “Coupled Ratios” Analysis: Q1 2015

Conspicuous by its absence, investment-auto-motives intentionally chose not to provide “coupled ratios” positional analysis for the Q4 2014.

By YE 2014 it was recognised that the powerful effects of the ECB's QE actions, very much required for the Euro-zone's real-economy revival, would inevitably induce the inevitable share-price boost effect; as both newly released € denominated liquidity and portions of global liquidity sought "easy-money'' returns with the possibility of indiscriminate 'chart chasing'.

Since 6 of the 11 global auto-makers are effectively housed in Europe, with the majority of these with heavy vehicle sales bias within Europe, it was inevitable that as consumer cyclicals at least some of these companies MarketCap valuations would be temporarily artificially effected by the QE. This obviously recognised by the broader capital markets, yet creating the possibility of a greater correction if European sales and margins (together with harder landing in China than supposed) do not meet mid-term 'new norm' revenue expectations.

James Mackintosh of the FT recently highlighted the fact that amongst the various sectors it was European car-makers which rode the greatest QE uplift.

Post-peak decline has since induced, as speculatively driven profits have been taken by certain investment (ie trading) factions, as the likelihood of extensive month on month ECB bond-buying is considered to become unlikely. With this a notional renewed rationality should become apparent. However, the ECB has stated that 'Draghi's Put' will be applied as necessary over the full term, this possibly central bank double-speak to induce the capital market's led recovery so seeing earlier tapering-off, which is the interpretation investors and traders appear to currently have given the 'good news' growth stories out of certain EU countries.

However, any such stalling of growth will inevitably demand continued QE. With such real-economy withdrawls and counter-acting medicinal cash injections will likely come share price volatility; enjoyed by traders and even some CFOs (offering buy-back propositions), but frustrating for the long-term value investor. 

“Coupled Ratios” Analysis -

As is now well engrained, 'Coupled Ratios' was formulated to pictorially coalesce the most popularly deployed investment measures across the four primary investment considerations.

The critical graphical element – depicting 'cartesian co-ordinates' - provides a far more easily digested interpretation of the overall statistical backdrop.

These being:

- Market Valuation Ratios

- Profitability Ratios

- Liquidity Ratios

- Debt Ratios

The first consists of P/E (price/earnings) vs P/B (price to book value). The second of Profit Margin vs RoE (return on equity). The third of Current Ratio vs Operational Cash-flow Ratio. The fourth of Total Cash vs Total Debt.

NB.

It must be stated and re-stated that although far more definitive in its own right as a contributive intellectual tool, the fact is that “Coupled Ratios” Analysis must be utilised in addition to investment reality and sentiment regards individual auto-maker's exposure to macro-economic global and regional tailwinds / headwinds, aswell as distinct micro-level influences at market-sector, sub-sector and critically at individual company level.

Q1 2015 Positioning -

Given the intentional absence of a YE2014 depiction, the graphic starts afresh.

Market Valuation Ratios -

Even within this QE boost period, in order to maintain cold rationality beyond the immediate market peak, the frame of the 'investment window' remains unaltered.

Wholly within the lower portion of the window is Hyundai, with VW (having been higher) now positioned well within the top-right outer boundary, whilst Honda and Renault are respectively seen to be near and at the upper-most boundary.

In this regard each must be viewed for its investment standing,

Hyundai recognised as having previously gained sales during the after-effect of the Western financial crisis on its competitors, now facing a combination of counter-acting boosted western vs slowed EM global sales and need for sizable CapEx.

Somewhat Similarly,Volkswagen's internal board-level ructions (Piëch and Winterkorn) have at least brought about a sense of strategic reconsideration and moderation of share-price and so P/E (this fortuitous to institutional investors). It must battle slowed sales in critical China, the need to far better attract the USA market toward the VW brand and the requirement for a new low-cost global car - the toppling of the Gol in Brazil perhaps a wake-up call,. To this end, although momentarily fallen upon his sword, though still with major influence, Piëch has been wholly right.

Honda has been highly consistent / static in its position, this very possibly well managed by Honda's executives so as to maintain an investment attraction. However, it has faced hurdles over the past year or so as its own internally created problems (ie product quality) have sapped the positive 'export effect' of looser Yen policy. Critical has been its loss of strong market grip over the years on the small-medium sized cross-over segment (ie C-RV), encroachment on Accord sedan in the USA and the now ageing yet still practical sub-compact Jazz.

Renault's P/E obviously much boosted by the QE-effect, but also recognised as offering a strong target market line-up of vehicles in the all important European B/C segment (hatchbacks and Cross-Overs) aswell as gaining from the upswing in commercial vehicle fleet sales as the business cycle improves.

Beyond yet close to the outer-boundary (top-right) is GM and Toyota.

Toyota has been fortunate enough to ride an Abenomics induced tailwind that has had great effect in the USA and China, which along with its conservative common-sense range, perception of dependability, and the broadened hybrid portfolio has ticked many consumer boxes; the renewed demand effect in the USA together with the Yen's weakening and Honda's loss of market momentum providing thus far a perfect storm.

Toyota, as with BMW and Daimler closeby, sits below the P/E denomination line but beyond the P/B line. The higher P/B typically reflects investors' positive sentiment, thus must be viewed in their own merits, eg Daimler's conglomerate nature and very positive car sales, and BMW's future product pipeline.

Ford likewise sits far to the right, demonstrating high P/B, well beyond the conservative investment window, whilst FCA Group sits high on the P/E scale. Each demonstrating respective investor perceptions of: for Ford the confluence of the USA's economic confidence and its effect upon new F-series sales and unit margins; whilst for FIAT belief that slowed N. American sales income will be complimented by Italy's economic rebound (mirroring Spain's) and thereafter South America, the impact of improved margins available from the expansion of the 500 range with 'L' and 'X', even if unconvinced about aspects of FCA's long-term global brand strategy story.

Peugeot (PSA) presently remains very much an outlier, its estimated high P/E value partly attributed to the 'backstop' equity interests of French and Chinese governments – who themselves may have prompted heavy institutional buying with likewise long term horizons for Europe and China. Similarly, those who are willing to notionally 'over-pay' in advance of France's economic improvement, car range renewal, the new Europe-wide demand for its core competence in small to maxi-medium sized vans; and the likelihood of trade re-opening with Iranian VMs and OEMs.

But critically, after the QE price boost and “momentum-buying”, much depends upon the consumer take-up in Europe for new vehicles, this itself assisted by car-makers' operating as both product retailers and finance houses with then greater flexibility in sales and financing functions.

Profitability Ratios -

Within the investment window it is the Koreans and Japanese that presently hold greatest sway, with Hyundai still consistently leading, and Toyota now taking a strong second place thanks to previously mention attributes. BMW maintains its solid position, whilst Daimler has been seen to climb markedly over the preceding 4 quarters or so thanks largely to its car division. VW stays within the window, albeit at a lower level because of the changed earnings dynamics for the VW brand in China.

Nudging the lower boundary is Renault, having slowly improved profitability and so incremental movement toward this demarkation line over the preceding 12 months.

Conversley, previously on the lower boundary and awaiting entry, Honda has lost profitability in the face of reduced domestic cars sales, static global vehicle and power-products volumes, marginally better motorcycles, but increased COGS and recall/warranty impacts. Thus in Q1 lost part of the ground previously made and sits mid-stream below the window.

Closeby GM and Ford sit together, the former's previous progress slowed by massive vehicle recall costs (in the ignition barrel debacle et al) and now seemingly rebounding (albeit into a slowed yet bigger US marketplace and TIV), whilst Ford has thus far been slowed somewhat by domestic and Chinese CapEx demands (such as the Kansas truck facility) and the greater comparative impact of international divisional losses (Europe, S.America, Russia) on its strong domestic income stream.

FCA Group now sits just above the break-even point.

Liquidity Ratios -

The Abenomics boost has done much to provide Toyota with a prenetly unassailable liquidity position as regards its Operational Cash Flow Ratio; thus it sits centrally within the investment window.

Others including Daimler, BMW, Ford and VW have balanced improved sales with Capital Expenditure and Research-Development cost demands to provide an increasingly convincing latter-day story regards cash generation and cash conservation and thus working capital flexibility.

GM has remained virtually static outside the window with a lower OCF Ratio, this measure perhaps less of an issue for the company given its “fortress balance sheet”, though set to improve after the last of the extra-ordinary recall costs have been met.

Honda has slipped to near investment window status in Q3 2014 to just about in positive OCF ratio territory.

In the negative realm, Renault and Hyundai remain static to where each was six months ago, whilst FCA is estimated to have improved. The greatest shifts however involves Peugeot, six months ago demonstrating its OCF worth, today's position very different.

[NB an absence of directly reported Current Liabilities data from both FCA Group and Honda has necessitated estimations regards Operational Cash Flow standing]

Debt Ratios -

There has been general improvement of Cash vs Debt levels for most automakers as improved revenues, EBIT and PaT have allowed companies to pay down their various forms of loans.

GM, FCA and Hyundai remain within the 1:2 segment, as they were previously, but with improved cash cushions. Peugeot appears to have directed a portion of its OCF toward cash preservation,with its improved standing on the lower 1:2 segment boundary.

Renault appears unchanged over the last six months, sat on the lower 1:3 boundary.

Toyota shows improvement by progressing into the 1:3 section, having been formerly lower upon the 1:4 line.

Within the 1:4 segment are Ford and VW, both using the present low cost of capital environment to grow borrowing serviced by improved revenues.

Just beyond the investment window is Honda, as was previously, with also BMW and Daimler further out. BMW has remained somewhat static with slight debt increase, whilst Daimler has used net income to boost cash position and similarly deploy the favourable borrowing environment to marginally increase debt.

Results -

The theoretical investment case per auto-maker is judged by the number of 'appearances' it shows across all four investment categories.

Four Appearances:

- Volkswagen

Three Appearances:

- Toyota (with nearly 4 appearances)

- Hyundai

Two Appearances:

- Renault (with nearly 3 appearances)

- BMW

- Daimler

- Ford

One Appearance:

- General Motors (with nearly 2 appearances)

- Honda (with nearly 2 appearances)

- FCA Group

- Peugeot (PSA)

Conclusion -

The depicted graphs represent data gleaned from the merged and matched data sets taken from corporate accounts, investor presentations and when necessary independently reported statistics (as necessary substitutes). The outcome obviously seeks to highlight the logical, theoretical investment attractiveness of each of the global eleven players, utilising Q1 results and recent (13.05.2015) stock prices.

Accompanying what appears a general decline in macro-economic policy interventionism by central banks and governments, is the obvious speculative ability to instinctively gauge investment value. Whilst certain regions, markets, asset classes and sectors will be reactive to event-driven news, as the west slowly normalises, so increasingly, the old fashioned 'fundamentals' and 'value' approach to investment – far broader and far deeper in 'top-down' and 'bottom-up' analysis – comes into its own; even in this highly algorithmic, technically led trading age.

Thus making distinctive tools such as “Coupled Ratios” Analysis more useful than ever.

Technologically, ever more machines can and will continue to be programmed to survey ever greater swathes companies' valuation metrics as the core of arbitrage speculation, and likewise from the people-led marketing angle, IPO book-runners and brokers will continue to hype-up the prospects for client companies about to publicly list or perhaps chose equity financing over debt ...”plus ça change, plus c'est la même chose”.

What will not change is the absorbed and obsessive investor attitude that seeks to amass from the great swirl of information – both quantitative (as per “coupled ratios”) and qualitative – the sound investment story which ultimately alters the broader market's investment perception and the basis of company fundamentals, so as to provide 'quick-fire', medium-term and far-horizon investment returns.

Motivational Message to Entrepreneurs

The global 11 auto-makers have now completed Q1 2015 reporting, so the provision of 'Coupled Ratios' analysis will be forthcoming to gauge relative theoretical investment positions and comparasions; excluding macro influences, recent micro influences and respective 'technical dynamics' of share price charts.

In the meantime, a message to maintain the motivational cause and core of the entrepreneur.

Philosophical Continuum -

Previously investment-auto-motives highlighted how today's very much valued entrepreneurial spirit was perhaps best conveyed by the philosophical perspectives of Nietzsche and the “ubermensche” spirit.

Similarly late Victorian minds were previously mentioned, but it was perhaps George Bernard Shaw who summed-up the progressive attitude best in 'Man and Superman'...

“the reasonable man adapts himself to the world; the unreasonable man persists in trying to adapt the world to himself. Therefore all progress depends upon the unreasonable man”.

Simplistically then entrepreneurs then are wholly 'unreasonable' people (Q.E.D.), unwilling to settle into - what most know - to be a flawed and far from perfect world. Instead, the best of them combine a highly logical rationality with creative insights to identify or visualise an untapped 'white space'.

However, as many will affirm, such a personal journey of self-direction – as much a spiritual path as a cerebral one – is typically beset with sizeable and lengthy tribulations.

None more so than the 'contra mundum' battle against society's perceptions of the (constantly re-enforced) “given” norms.

“Given” being the prescient term, since to very necessarily maintain a civil society the public and so personal mindset must be subtly moulded, this evident in all cultures and done so from birth.

However, perhaps never in global history has the impact of social-psychology been so prevalent as today. Unlike the past where best-practice norms were handed down as part of smaller group identity, the 20^th century advent of mass-media, and 21^st century of media-submersion, provides for ever greater subtle control of the ever expanding global masses. Yet critically, this media-driven “social glue” for the modern chattering classes increasingly undermines the critical ability of many to critically think for themselves.

Unsurprising then that the very definition of entrepreneurship has been perceptually co-opted by the IT based creative industries; with other forms of new ventures – disruptive or not - seen as far less intriguing. Little surprise then that previously with such little interest by the public and investors in the physical goods and services that it has been the IT moguls who have deployed great swathes of income gained from the “monetised masses” back toward next generation innovative objects.

Ironically then, the true entrepreneur today – as opposed to wholly manufactured proxy entrepreneur - faces what may be deemed as an even greater combination of headwinds than at any time in the past.

Headwinds include: much increased social / tribal group-think (somewhat akin to 1960s Japanese corporatism), the power of the brand vs original innovation, and critically the ability of power players to either stifle or co-opt the individual using highly Machiavellian methods (eg professional disruption, personal intimidation, pressure exerted via friends and family, IT enabled illegal spying techniques, mobilization of a social-stasi, etc).

Thus, any entrepreneur today will in many instances need to have the will and conquering spirit of an olde-worlde American pioneer, the personal resilience of a POW and the soul of a Buddhist holy-man.

To this end, the most enlightened venturers will endeavour to serve greater society and in turn gain the fruits. But before gaining such influence and rewards, he or she may well identify with one of Rudyard Kipling's well known characters.

Excerpts from:

'Gunga Din'

You may talk o' gin and beer

When you're quartered safe out 'ere

…

But when it comes to slaughter

You will do your work on water,

An' you'll lick the bloomin' boots of 'im that's got it.

Now in Injia's sunny clime,

Where I used to spend my time

…

Of all them black-faced crew

The finest man I knew

Was our regimental bhisti, Gunga Din

'E would dot an' carry one

Till the longest day was done

An 'e didn't seem to know the use of fear.

If we charged or broke or cut,

You could bet your bloomi' nut,

'E'd be waiting fifty paces right flank rear.

An' for all is dirty 'ide

'E was white, clear white, inside

When 'e went to tend the wounded under fire!

It was “Din!, Din!, Din!”

With the bullets kickin' dust-spots on the green.

When the cartridges ran out,

You could hear the front files shout,

“Hi! Ammunition-mules an' Gunga Din!”

I sha'n't forgit the night
When I dropped be'ind the fight
With a bullet where my belt plate should 'a' been.
I was chokin' mad with thirst,
An' the man that spied me first
Was our good old grinnin', gruntin' Gunga Din.
'E lifted up my 'ead,
An' he plugged me where I bled,
An' 'e guv me 'arf-a-pint o' water-green:
It was crawlin' and it stunk,
But of all the drinks I've drunk,
I'm gratefullest to one from Gunga Din.
It was "Din! Din! Din!"

…

'E carried me away
To where a dooli lay,
An' a bullet come an' drilled the beggar clean.
'E put me safe inside,
An' just before 'e died:
"I 'ope you liked your drink," sez Gunga Din.

So I'll meet 'im later on
At the place where 'e is gone—
Where it's always double drill and no canteen;

'E'll be squattin' on the coals,
Givin' drink to poor damned souls,
An' I'll get a swig in hell from Gunga Din!
Yes, Din! Din! Din!

You Lazarushian-leather Gunga Din!

Though I've belted you and flayed you,
By the living Gawd that made you,
You're a better man than me, Gunga Din!

Modern Campaign Mascot and Banner -

For all the male and female Gunga Din's of this world, who carve their own path through 'thick and thin', there are perhaps two contemporary idioms that might serve well as useful 'back of mind' spiritual motivators.

1. The “Indestructable” Toyota Hilux (á la Top Gear)

2. The rebellious young ladies of (fictional) St Trinians

400th Web-Log

To mark the fourth-hundreth instalment of the investment-auto-motives weblog, an oft referred, very clichéd, yet still wholly worthy piece of late 19^th century poetry by Rudyard Kipling.

Very much of its time, and akin to the pioneering belief systems of Ralph Waldo Emerson (who hailed Henry Ford), it depicts a very Nietzschean spirit of self-worth - and “will to power” - for the betterment of self, and society at large.

Decades later on film, this all too human instinctual, natural need for self-autonomy is perhaps best illustrated by the young central character of François Truffaut's “Quatre Cents Coups” (“400 Blows”).

“IF”

IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'

If you can talk with crowds and keep your virtue,
or walk with Kings - nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man, my son!

Dedicated to my truly noble father who retained good conscience and never sold his soul, and as such truly 'stood alone'.

PESTEL Trends – UK Mass Media – Top Gear "3.0" : Shifting Emphasis for the 1970s-like New Norm.

Here in the UK a news story which has featured highly in populist chatter over recent weeks has been the dismissal, and now seeming re-instatement, of Jeremy Clarkson from BBC2's prime time Sunday night TV show 'Top Gear'.

Over one million on-line signatures demanded that the BBC return the presenter, by those who had an affinity with the man's “unreconstructed” brashness and non-”PC” persona; even if it be 'turbo-charged' in part to provide distinction and mass popularity.

“Read All About It” -

The original dismissal itself obviously offered a talent-poaching opportunity for other terrestrial and internet based TV networks - particularly ITV, Sky and possibly BT and Netflix - as they themselves seek to strengthen their own business appeal.

This achieved either through improved advertising rates underpinned by the audience attraction of star names, or via a direct expansion of service subscriptions for pay-for-content broadcasts.

As to what future potential still remains for such external parties is presently unclear, given that Clarkson and his loyal band of merry men in the form of James May and Richard Hammond, are reported as having latterly agreed to undertake the (already organised) live performances of “Top Gear's World Tour”, itself starting in Norway.

The Commercial Bandwagon -

This latest 'brew-haha' has however – somewhat fortuitously - provided much high grade publicity.

Something akin to the break-up rumours or “last appearance” announcements of major rock bands, raising the likelihood of “sell-out” arena ticket sales. Given today's 24/7 media driven, “monetising” world, it is even conceivable that the whole thing was completely stage-managed, even if to the ignorance of its central character.

[NB If true, such real-world 'acting' by those seeking to puppeteer Clarkson, very unfortunately reflects the now repugnant state of everyday British social affairs. This in effect a merging of social reality and personal agendas, in which it seems many people all too willingly 'act' to obtain their typically petty goal. No doubt telling themselves it is the 21^st century standard. If unaltered, this now engrained everyday en mass behaviour will eventually lead to substantial levels of social distrust].

As to whether the Clarkson led trio eventually jump ship to a better media deal elsewhere, we shall have to wait and see, Though any such instance would obviously be of prime interest to the shareholders of the aforementioned publicly listed media enterprises.

The popularity of 'Top Gear's' high-entertainment format was itself very different when re-introduced over a decade ago as compared to the show's previous, seemingly long defunct incarnations.

Top Gear “Version 1.0” -

As is now well recognised, yesteryear formats for the “programme” (not “show”) between 1977 and 2001 more broadly reflected Lord Reith's inaugural doctrine for the BBC: to “inform, educate and entertain”. Initially produced by Birmingham's Pebble Mill base and introduced by the news-reader Angela Rippon (for the Midlands TV region only) and assisted by Barrie Gill, it sought to demonstrate a light investigative manner and gain credentials as a serious motoring magazine; something welcomed by the increasingly affluent and mobile masses.

This same tone later echoed with inclusion of the IAM (Institute of Advanced Motorists) and by the presenters Noel Edmonds, Sue Baker, Frank Page, Chris Goffey, William Woollard, Gill Pyrah and Julia Bradbury. Of the day issues, specific and competitive vehicle reports and such would be seriously discussed so as to provide the viewer with far greater general motoring, consumer and regulatory affairs, and auto-industry insight.

The now long-lived current format – “version 2.0” - has been very much biased toward the latter element of “entertainment” via the vehicular adventures and antics of the trio.

Top Gear “Release 2.0” -

Established soon after the turn of the milenium it would become the TV motoring equivelent of previously absorbed 'Brit-Pop'.

Created as 'authentic', with bare-bones studio with the central platform showcasing the “iconic” pieces of a Sofa inspired by the Ron Arad 'Rover P5 Chair', and the glass-topped F1 engine block table; the studio itself set within an ex-RAF airfield appeared as vast as the then newly constructed Greenwich Dome.

The first few episodes were lacklustre at best, until basic changes were undertaken, including the mixing of female and ethnic faces; a mix which was - and remains - a somewhat smug and self satisfied white men's zone. (To add to male viewer interest, the attractive females in the audience typically placed in the sight-lines of the cameras), Content improvements were made with the addition of audience interactive items, such as the social-stylised “cool wall”,  the “star in a reasonably priced car" board” and the Clarkson-Hammond-May “intra-competition" board.

Much increased viewing figures by 2004 allowed for an ever increasing budget, able to travel to and across Europe, and to more exotic regions: from the USA to Japan, from China to Vietnam, the Middle-East to Africa, Australia to Canada.

Whilst this format has proven immensely popular at home and worldwide over the last 13 years (as gauged by BBC Worldwide's 'Top Gear' income stream), the very zeitgeist of what led to the creation of today's show has, within the UK at least, has shifted dramatically since 2008/9.

This radical change in socio-economic backdrop begs the question as to whether the show itself would gain by once again evolving its character, content and presentation formats.

Where Life Meets Art -

The pertinent question is to what degree the programme effectively substitutes and possibly eventually replaces the actual emotional quotient of real-world car ownership in the West.

Has the car become so 'fetishised' in the post-modern philosophical sense, that it mimics the hyper-real role of food programmes beamed into people's homes. Whilst celebrity TV chefs prepare and eat as high-grade luscious food, the viewing public simultaneously actually consumes far less wholesome fare, yet is absorbed into the overall food fantasy by the merging of subject and object.

Likewise, an automotive TV diet of newly released super-cars deployed on cross-continental races, mid-level hatchbacks used for “a celebrity in a reasonably priced car” race competition, budget hatchbacks used in autos inspired football and rugby and threesome travels in an array of vehicle types could be seen as the necessary fantasy antidote to an all too conventional life lived. One with a script-laden blue-oval, banner brandishing griffin, or 'people's car' roundel, all too often stuck in traffic or piling-on motor-way miles, its residual depreciation almost seemingly inverse to the rising of its dashboard odometre.

BBC WorldWide's own media-export success of Top Gear suggests that the global public's “automotive consumption” still requires a media-fuelled fantasy element; either as: the dream-scape counter-balance, or more encouragingly, as temptation into new vehicle ownership within expanding and newly emerging regions.

More pertinently the programme plays an audio-visual consumption role (across age ranges) which provides a subtler, more diluted but similar stimulation to that of “Gen Y” and “Millenial” video-gamers psychologically glued to the 'Grand Theft Auto' series and similar. Between 35 and 17, many cannot afford to run a car, or at least a car of their own true choice.

In an improving but still economically surpressed era, coupled with a somewhat eco-propogandist and eco-regulatory regime that has promoted private vehicle substitution by bus, train and bicycle, which results in generally lower motoring expectations and demands by the young, it is a wonder that the automobile still has the regard it generally holds. However, add the stagnation of overall (Euro-Global) Formula One viewership together with the decline of feasible owner-driver servicing and repair on the domestic driveway (given the IT diagnostic complexities of modern vehicles), and it is easy to see how conversly – as an opposite reaction -'Top Gear' provides an alternative mental submersion.

Posing a Dilemma -

Given this context, the prime question is...

“to what degree today, and critically into the future, will the British and Western public actually retains its fascination for cars; as products in their own functional and emotional right”.

Has the West effectively over-dosed on the car and fallen out of love?

In an increasingly cyber-orientated and virtually-augmented environment, has auto-aspiration for model and badge declined? Are people presently weaning themselves off  the conventional automobile, by imagining alternatives ranging from the electric-bikes to driverless-cars, and slowly entering that world through purchases such as the boot / trunk housed fold-away pedal bicycle?

This question vitally important to not only auto-based TV producers, but also the future of automotive and private-vehicle investment in all its different guises. (One of which is the classic car fraternity). Another UK programme presented by Quentin Wilson and Jodie Kidd devoted to this economically evolving arena.

(Re) Generating Auto Industry Interest -

Whilst a useful ongoing debate, of more direct pertinence to the immediately previous essays, the remainder of this web-log chooses to compliment the content of a wholly jingoistic, yet very memorable, edition of Top Gear (Series 20 episode 6).

Broadcast at a vital point in time when Britain's public and politicians alike needed to wake-up to the power of domestic manufacturing as a socio-economic engine, the usually 'troublesome trio' made a very powerful "Made in Britain" boast.

With Buckingham Palace as backdrop, and The Mall deployed as the 'nation's driveway', a plethora of UK made vehicles were displayed to invoke national pride and regenerate multi-stakeholder interests.

Whilst the turnout was strong, with many firms highlighting their many diffferent types of vehicles, the programme was understandably unable to draw all UK producers, and of those shown, only (again understandably) showcased the typically most exciting and glamourous.

Thus to compliment Top Gear's effort, investment-auto-motives presents a more exhaustive list:

(along with with basic investor status)

Key:

NYSE – New York Stock Exchange

LSE – London Stock Exchange

TSE – Tokyo Stock Exchange

“BF” – Bourse Frankfurt

“BP”– Bourse de Paris

BSE – Bombay (Mumbai) Stock Exchange

Mass Volume Production Vehicles:

Nissan (publicly traded on TSE) [Renault traded on “BP”]

Toyota (publicly traded on NYSE / TSE)

Honda (publicly traded on NYSE / TSE)

Vauxhall [cars and licenced vans] (GM publicly traded on NYSE)

Mini (owned by BMW) [BMW traded on “BF”]

Mid Volume Production Vehicles:

Jaguar - Land Rover (owned by TATA Motors, traded on BSE and NYSE)

Intermediate Volume Production Vehicles:

Aston Martin Lagonda (privately owned)

Rolls-Royce (BMW Group)

Bentley (Volkswagen Group)

McLaren (privately owned)

Low Volume Production Vehicles:

Morgan Motor (privately owned)

Ginetta (privately owned)

Marcos (privately owned)

Noble (privately owned)

Caterham (privately owned)

Westfield (privately owned)

MK (privately owned)

Ariel (privately owned)

Briggs [BAC] (privately owned)

Bristol (owned by KamKorp)

David Brown (privately owned)

Radical (privately owned)

Grinnal (privately owned)

Ultima (privately owned)

Arash (privately owned)

TVR (privately owned) [currently non producing]

Connaught (privately owned) [Status unknown]

Lister (owned by Warrantywise)

London Taxis International (owned by Geely of China)

MetroCab (owned by Kamkorp)

JZR Trikes (privately owned)

Triking (privately owned)

Vehicle Reconfiguration Companies:

Bowler Motorsport (Land Rover Modification) (privately owned)

Twisted Automotive (Land Rover Adaption) (privately owned)

Overfinch (Range Rover Adaption) (privately owned)

Kahn Design (Range Rover Adaption) (owned by Kahn Group)

Chelsea Truck Company (LR Defender Adaption) (subsiduary of Kahn Group)

Urban Truck (LR Defender Adaption)

Coleman Milne (Limousines and Hearses body-fitters)

MacNellie (Chassis-Cab body-fitters)

Alloy Bodies (Chassis-Cab body-fitters)

Truck, Bus and Coach Producers:

Leyland Trucks [DAF branded) [owned by PACCAR Inc, USA] (traded on NYSE)

Wrightbus (privately owned)

Alexander-Dennis [inc Plaxton] (privately owned)

Agricultural and Industrial Vehicle Producers:

JCB (privately owned)

CaseNewHolland (publicly traded via CNH Industrial NV on NYSE)

Military Vehicles:

BAE Systems - Land Systems Division (Group publicly traded on LSE)

Land Rover (part of JLR, owned by TATA Motors, see above)

Marshall ADG (privately owned)

Motorcycle Producers:

Triumph Motorcycles (privately owned)

Norton Motorcycles (privately owned)

Ariel [tbc] (privately owned0

Hesketh (privately owned)

CCM [tbc] (privately owned)

Metisse [tbc] (privately owned)

Product Engineering Consultants:

Ricardo plc (publicly traded on LSE)

Williams GP Holdings (publicly traded on DAX)

Prodrive (privately owned)

Cosworth (privately owned)

Specialist Components:

Hewland [gearboxes] (privately owned)

Torotrack plc (publicly traded)

Xtrac (privately owned)

Zytec (privately owned)

Auto Industry Facilities Constructors -

Rolton Group (privately owned)

The Take Away -

This web-log started by comparing the very different televisual production formats of the 'Top Gear' programme, in its original “news-worthy” vs “light-entertainment” guises. And questions whether the present format requires yet another re-shuffle, into “Version 3.0”?

The 2002 change-over was undertaken for good reason, although very belated. Even with a succession of new presenters, including Clarkson and May, the original template had become somewhat stale and irrelevant for a new generation of viewers. increasingly less attuned to the very much changed mindsets of 1990s and 2000s drivers.

Unlike the demographgic and sensibilities of the 1970s and early 1980s motorists (predominantly middle aged males and middle class females) by the 1990s a much wider age range of car owner and user had become apparent. Now both sexes across the full age spectrum, with a higher disposable income, and who for the most part were not so necessarily economically and technically orientated as their parents generation. It was a very different era to that in which 'Top Gear' had originally been born.

By the 2000s cars had increasingly become both more functional for the more utilitarian driver (eg MPVs), and critically more socially symbolic to the majority of “lifestyle aspirationals”, thanks to the economic rising tide of the mid 1980s to 2008, which had in turn underpinned the popular rise of premium badged cars (eg GTI thereafter BMW, Audi etc).

Those good times had then substantially changed the face of UK motoring, and more presciently, the very mentality of the mass populace. That credit-fueled, media-led and youth orientated 30 year span had gradually eroded the practicality and seriousness engendered by the previous Baby-Boomer generation and esposued by 'Top Gear' version 1.0.

Likewise a dramatic shift has occured again, one in which we should perhaps “look back to the future”.

Today's economic 'New Norm' of managed low inflation mated with only gradual income rises, means that even older “Generation Xers”, aswell as younger “Yers” and newer “Milennials” have in the vast majority of cases been literally forced to adjust and adopt the more cautious and sensible economic outlook last seen by their Baby-Boomer parents and grand-parents.

Given this broad Western reality, a new era introduced by a new “version 3” format would logically be in product conceptualisation phase by either the strategy executives within the core of the BBC, BBC Worldwide managers, or possibly by Clarkson-Hammond-May themselves (as possible syndicate producers in their own right).

The reason for this new era would be:

A. an answer to the viewer 'over-dose' of 'Top Gear 2.0”, which has run for so long, and has been arguably worn-out by continual re-runs on the Dave Channel.

B. the need to remould the programme to fit the far more serious Western socio-economic climate of today.

C. the possibility of better honing the individual international versions for local markets

D. the future “coverage” potential of a now rebounding UK Autos “High Value Manufacturing” scene.

The fact is that Top Gear 2.0's effective 'blokey' escapism was very much required for a period during which the UK's own domestic automotive manufacturing climate had slowed dramatically.

But a new re-formatted 'Top Gear 3.0' could feasibly merge the best of versions 1.0 and 2.0, thereby adding more informative consumer insights for cash-strapped motorists, a far higher technical and industrial dimension to re-enthuse the country's new apprentices, plus critically central and local government supported industrial zones and critically the UK's domestic and FDI investment communities.

To this end 'Top Gear' should once again re-align itself and induce itself with a new automotive 'spirit of ecstacy' that befits the more upbeat yet cautiously sensible zeitgeist.

Post Script -

Much 'Said In (the) Jest' of Jezza -

Clarkson's massive popularity amongst broad swathes of Brits of all colours and creeds, may very well be because they themselves feel hemmed-in by the overt political correctness of modern life, to which 'Jezza' (through his somewhat naughty schoolboy manner) simply refuses to comply  Something which in actuality many think but dare not do.

But even “the schoolboy” recognises what is offensive to others, and so when seemingly requested to sing the rhyme “eeny, meeny, miny, moe” by the film-makers, he intentionally mumbled the offensive word.

This post script is not here to defend the manner and behaviour of an extremely well paid and comfortably well off TV presenter – his enormous salary is no doubt more offensive to those viewers who scrape-by on little – but it must be recognised that Clarkson seems to be the sociological release valve for many in Britain.

Today's ethereal but all too real Big-Brother pan-optical authoritarianism (via CCTV and Web scanning) plus the societal diktats of modern Britain (often generated by the improportional interests of minority interest groups) appears the antithesis of what previously made Britain great.

There should never be an atmosphere of majority racism, sexism etc, but the truisms of the self-interest tribal behaviour across many different social tribes (from “hoody” street gangs to jewish nepotism to oxbridge “boys clubs”) cannot be denied. Strength and power has always been retained and gained by a core collective.

However, it is the overtly politicised modern social atmosphere in which people can say virtually nothing, with the press deployed as manufactured mass mouthpieces, which has indoctrinated many with a kind of ever-present schizophrenic animosity and guilt.

It is this reality which has led to the popularity of Nigel Farage and UKIP, not so much because of its headline anti-EU, anti-immigration stance, but precisely because Farage weighs against the atmosphere of over-whelming politicised social oppression.

And so likewise, akin to the schoolboy japes of yesteryear's heavily regulated and repressed public schools, people of all colours, creeds and sexes ironically subliminally live vicariously through Clarkson's seeming Neanderthal manner.

To intentionally re-deploy the 1970s wording, no doubt many “honkies”, “chalkies” and “but-buts” will be metaphorically honking their car horns for Clarkson, and doing so not because they are secretly racist, but simply because they've had enough of a constantly politicised “thin ice” society which fragments people into ultimately competing groups; and in which for many even experienced truisms cannot even be muttered.

Britain's Union Flag is of course “red, white and blue”...but perhaps another version should be created for periodic illustrations of social unity in “white, black and brown”.

PPS -

Beyond the instances of racism caused by group indoctrination against other colours or creeds, racism itself will all too naturally be the reactionary result  of those individuals who themselves have been violently and/or psychologically victimised by another distinctly homogeneous group.

Society at large must be very very watchful of this type of behaviour - especially that of distinct group vs an individual -  often using the tactics of socially enabled guerrilla warfare (eg social exclusion,  mobility constraint to enable observation of personal movement patterns, unyielding direct and indirect persecution, premeditated violence masked as "unfortunate incident", leading to intended isolation and psychological destruction of that person).

Without a doubt, "Not on my watch" should be society's watchword.