Penske Auto Group - Investing?

[SmartBob]

Right now the Samrt has to contend with competitors that offer identical MPG at various prices. Some used cars can get the same mileage for a fraction of the cost of a SMART.

- Orlando

It's been written, let it be done.....NO dealer will price gouge ....it is verbotten. Orlando..read up...a lot before you post again. :P

Oh, and to return to the hijacked topic. A friend and I are buying some PAG stock tommorrow. I think we'll do pretty well. Another friend invested $10k and his broker matched it. Not big $$$ but it'll still be fun I think.

[SmartShanna]

This is an interesting piecehttp://seekingalpha.com/article/4659...art-investment

[SmartBob]

An interesting article but anti-climactic at best. All that writing lead down to a small relevant sentence or two that seemed non-commital to me. Everything that's good about PAG will hit in Jan-Mar after that, time will tell. The auto industry has been slow because the prices are high (SUV glut) and so are gas costs. I wouldn't predict later returns because there are other manufacturers waiting in the wings such as Toyota, VW and even Fiat. The U.S. needs an "economy" car and right now the Fortwo is IT! Most of the people I talk to say buy now at $19-20/share and you can't go wrong. I'm on it. Film at eleven.

Thanks Shanna for your input. I'd love to hear some other opinions. This could be a fun topic.

[SmartShanna]

Bob,
I completely agree about the buy and wait scenario. What was interesting to me about the article was the lukewarm nature. This car and stack could be the auto industry's iphone

[propes]

What I found interesting is how it talked about the amount of inventory the other companies are keeping - always something that burns money; versus the model PAG has been hinting may be permanent - the build to order. Certainly, it's much easier with the small assembly time of the smart, and it's not a panacea (see Dell's recent woes), but it does open up PAG, and smart in particular, to additional buzz and exposure even after the initial fortwo buzz has worn off.

Personally, I'd love to see additional competitors to the fortwo out there; smart and PAG have the opportunity to prove that a market does exist for it, instead of these lumbering (and dangerous) urban assault vehicles.

[Fredvon4]

If this author's prediction is correct and the Smart does a fast initial burn but fizzles by year two, then PAG will be sold short as the author discloses I predict that if gas prices remain semi stable under $3.50 this is entirely possible

I see another problem... competition vs delivery capacity... We Americans are a very impatient bunch....

If the Smart catches on hard and starts a serious fire... and this could easily happen if gasoline breaches $3.5 heading to $4.00 per gallon... then the competition will flourish while PAG scrambles to try and get higher volume out of an already max capacity assembly plant overseas.

I might buy one or two shares as novelty... but that is just me--- I don't play in fund markets and stay away from hurting my head with stock speculation

The managers of my 401 and mutual fund plans are much Smarter then I am in this area

[SmartBob]

I'm curious that MB doesn't have another plant covertly in the wings either built or about to be. Also what's the likelyhood of an American or Canadian plant under wraps somewhere waiting to spring if the Fortwo takes off. Regardless it's all very exciting and fun.

[propes]

There's a soon-to-be empty Ford plant in St. Paul.

[Carnut]

Keep in mind that up to now they are bleeding billion +. Will another 24,000 sales to USA stem that?

[propes]

All depends on what caused the red ink. Was it R&D? Was it the discontinued forfour and roadster? Or was it poor sales in general?

If it's R&D, then the information gained is applicable to all of Mercedes - they may have decided to have smart take the hit because it's better than spreading it around (owner of big time pro sports teams in the US do this all the time - funnel losses from other non-sports companies into the team - especially when pleading for government handouts for their teams).

If it's the other discontinued models, then things are OK - yes there's a hill to climb, but they'll be in the black now that they've pared things down to the profitable models.

If it's sales in general... well, it depends on how much MB wants to hold on.