Thursday, September 26, 2013

Market Cap and Ownership Structure of Auto Companies

Automotive companies are generally compared by the number of cars sold. For example; Toyota and GM are often in competition to sell the most number of cars in a year. While interesting, these seem kind of irrelevant. For instance; if one sells many cars but makes no money on them, they won't be in business for long. 

I think a more interesting indicator is market capitalization. This is basically the value of the company on the open market and is based on the beliefs of future earnings. Below is the value of each company as of September 2 2013.

Toyota is number one by a large margin and blows GM out of the water in terms of value. The second most valuable company, VW at $108 Billion dollars, is just over half of Toyota's $208 billion. 

Fiat, which currently owns over half of Chrysler (Chrysler isn't showed because it's owned by UAW and Fiat with no shares on market to price it), and is worth less then Tesla a new company that sells relatively few cars. 

These market values are not independent in the sense that some companies own parts of other companies. Below is a network graph with percentage of ownership along the edges with size of vertex proportional to market cap. An arrow pointing to a company from another indicates that company is partly owned  (for example A <- B means B owns part of A). 

Two things to note about the ownership graph:
1. It's easier to see how VW and Toyota both own part of Suzuki with this graph. Of course since Toyota owns Suzuki through its holding in Subaru so it's holding is minuscule.

2. There is cool menage a trois between Nissan, Renault, and Mercedes, where all have ownership in another.

Saturday, September 7, 2013

Mr. Al-Sabah Welcomes you to the Middle East

A very brief Letter to the Editor to the Financial Times discusses the relations among the Middle East succintly and accurately. Quoted in full:

"Sir, Iran is backing Assad. Gulf states are against Assad!

Assad is against Muslim Brotherhood. Muslim Brotherhood and Obama are against General Sisi.
But Gulf states are pro Sisi! Which means they are against Muslim Brotherhood!
Iran is pro Hamas, but Hamas is backing Muslim Brotherhood!
Obama is backing Muslim Brotherhood, yet Hamas is against the US!
Gulf states are pro US. But Turkey is with Gulf states against Assad; yet Turkey is pro Muslim Brotherhood against General Sisi. And General Sisi is being backed by the Gulf states!
Welcome to the Middle East and have a nice day."

These relations are quite difficult to comprehend all together, so I made a graph to try and clarify the relationships.

Yup, looks like the Middle East is a cluster****!

Thursday, September 5, 2013

Car Magazine Hot Hatch Hall of Fame Graphs

Car Magazine's June 2013 issue picked 17 of the "greatest hot hatches of all time" and included specs. Unfortanely they didn't include any graphs of numbers to see how hot hatches developed through time, so I took it upon myself as a civic duty (my way of giving back to the community) to display the numbers in graphs. I also included weight for each car (in lbs of course) and UK CPI index to find the real value of prices of cars sold when new.

Steady decline in 0-60 times throughout the years. The Peugoet 106 Rallye had the slowest time of all at 10.3 seconds and was sold between 1994 - 1998.  I've seen reported times for the Pug at 8.3 seconds so this might be a typo, then again it only has 100 bhp so its not going to be a speed demon...

Interestingly, some of the quickest hot hatches were sold in the late 1980's and early 1990's. These included the Lancia Delta Integrale (5.7 sec), Ford Escort Cosworth (6.2 sec), and Nissan Sunny GTI-R (6.1 sec). A plausible reason for the quickness of these cars was that all had AWD and therefore had more traction off the line to accelerate quickly.

 Above graph is Real Price when the car was new in 2009 Pounds. The real price of the Delta Integrale, Sunny GTI-R, and Ford Escort Cosworth are all relatively more expensive in real terms. However, the high cost of those cars was probably because of the very high performance for their time (and today's time, look at 0-60 mph).

Very generally cars go through life stages. When new they look bold and modern. When slightly old (5-10 years) they look dated and their faults are well known. But something interesting happens to cars after about 10 years: they start to look cool again and they are appreciated more. I wanted to see if this U-shaped "lifecycle" is present in the price data. To compare cars and their particular life cycle stage I divided the Real cost when new by the current cost today and plotted those values against time. The resulting figure is shown above. In some sense the U is there: a cars value relative to its initial real price declines for the first 10-15 years and then increases again. 

Looking at this graph, I'm thinking maybe I should buy a Puegeot 306 GTi-6. After all even now its performance are up to par with modern cars. In addition, its at the trough of the coolness curve so it might appreciate in value.

 Above two graphs show the what RPM the maximum horsepower and maximum torque occurs at for each car. The color is categorized by whether the car is turbocharged or not. Both graphs show that naturally aspirated cars increase RPM through time while turbocharged engines reduce RPM.

I'm kind of puzzled by this. Obviously to get more HP out of a naturally aspirated engine one needs to increase the rev range and should work in principle for Turbos. However, turbocharged engines seem to be taking a different route and are able to get the performance that surpasses that of a naturally aspirated engine but at a much (and continuously lower) rev band.

 Most engines are at 2 liters and doesn't appear to be a strong trend.

 Maximum Speed shows a strong trend by time.

Data and R Code: