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Source:
Stephen Girsky
IMF World Auto Council
June 2004
Morgan Stanley Research
Source:
The State of the Industry
• Global demand growth continues to be modest, with the exception of selected emerging markets.
• Excess capacity likely to continue, putting pressure on prices.
• OEM strategies to counter deflation have been to cut costs and get the consumer to “buy up”.
• Company updates• Questions
Morgan Stanley Research
Source:
Global Demand Growing at Slow Pace
55,000
56,000
57,000
58,000
59,000
60,000
61,000
62,000
2000 2001 2002 2003 2004E
Un
its
in
00
0Global Light Vehicle Demand
1.4% CAGR
LMC-JD Power & Morgan Stanley Research
Source:
Morgan Stanley Global Sales Forecast FY04E
United States
16.7 16.7 Flat
Western Europe
14.2 14.4 + 1%
Japan 5.8 5.9 + 2%
China 2.0 2.5 + 25%
2003A 2004E % ∆Units in MM
Morgan Stanley Research Estimates
Source:
Excess Capacity Estimated at 25-30%
45
50
55
60
65
70
75
80
2003
Assemby
Capacity
Global Utilization at 72%
Autofacts
Source:
Global Excess Capacity is Significant
• Honda contemplating importing small cars into U.S. from Brazil
• VW contemplating importing cars to Europe from Brazil• Honda to import cars to Europe from China• Ford/Toyota importing vehicles to Europe from Turkey
Morgan Stanley Research
Source:
OEMs Spending for Growth
60
80
100
120
140
160
180
200
Nissan Hyundai-Kia
Mitsubishi Renault Honda Toyota Fiat
13 of 14 OEMs had FY03 CapEx > D&A
BMW
Mazda
PSAFord VW
DCX
GM
Company data & Morgan Stanley Research
Source:
Zero Sum Game
• Slow growth and excess capacity suggest deflation/revenue pressures are likely to continue.
• Not everybody can be a winner.• Winners will be low cost producers who deliver good
product that consumers are willing to pay for.
Morgan Stanley Research
Source:
Capacity Situation Could Get Worse
NA Net Capacity Additions Over 1mm units
Ford (122)Nissan 250Toyota 180 Total 308
GM 125 Ford (48) DCX 80Honda 180Nissan 200Toyota 30 Total 567
Ford (211) GM (98) DCX 80Hyundai 235 Total 6
Toyota 150
2003 2004 2005 2006
Company data & Morgan Stanley ResearchUnits in 000
Source:
Every 1 Pt. of Share Translates into $1.0bn in Profits
1.03mm Units of Added Capacity is 6.2% of NA Capacity,or $5-$6bn in Pretax Profits
Detroit Three $3,143
N.A. Pretax Profit FY03 in MM
Company data & Morgan Stanley Research
Source:
Europe Estimated Capacity Additions
General Motors (200) (150) - - (350)
BMW 20 180 80 - 280
DaimlerChrysler 100 - - - 100
PSA Group 130 60 - 300 490
Nissan 100 - - - 100
Toyota 40 150 40 - 230
Hyundai - - - 200 200
Total Europe 190 240 120 500 1050
2003A 2004E 2005E 2006E ‘03-’06E
Company data & Morgan Stanley Research
Source:
China Estimated Capacity Additions
BMW 30 - - - 30
China Motor (Mitsubishi) 25 95 30 30 180
Citroen - - - 150 150
Fiat - 50 50 - 100
Ford 50 - 50 50 150
GM 100 (50) 150 50 250
Honda 60 120 - - 180
Hyundai 50 50 100 50 250
Kia - 50 200 200 450
Mazda 30 40 - - 70
Nissan/Renault 70 - 30 70 170
Toyota 50 30 70 50 200
VW 100 100 200 360 760
Other 270 150 190 - 610
Total China 835 635 1,090 1,010 3,570
2003A 2004E 2005E 2006E ‘04-’06E
Company data & Morgan Stanley Research
Source:
Revenue Pressures Worst Since 1970’s
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Ma
r-6
8
Ma
r-7
0
Ma
r-7
2
Ma
r-7
4
Ma
r-7
6
Ma
r-7
8
Ma
r-8
0
Ma
r-8
2
Ma
r-8
4
Ma
r-8
6
Ma
r-8
8
Ma
r-9
0
Ma
r-9
2
Ma
r-9
4
Ma
r-9
6
Ma
r-9
8
Ma
r-0
0
Ma
r-0
2
Ma
r-0
4
6
8
10
12
14
16
18
New Car CPI Avg Lt Dom Sls
New Car CPI vs. Light Domestic Sales
CPI & Morgan Stanley Research
Source:
Deflationary Pricing Since 2002
-2.3%
-1.8%
-1.3%
-0.8%
-0.3%
Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04
Y/Y Change in Monthly New Car CPI
CPI & Morgan Stanley Research
Source:
Price Reductions Pressure Manufacturers
• Every 1% Decline in Prices is Worth– $1.2bn at GM– $800mm at Ford– $500mm at Chrysler
Company data & Morgan Stanley Research
Source:
Deflation Not Just a N.A. Phenomenon
• GM offers €1,085 discount to prospective customers who order the new Astra before it reaches the market. Jan-04
• VW counters by offering €1,000 of extra trade-in values to prospective customers who switch from competitor cars to new Golf. Jan-04
• VW offers free air conditioning (implied discount of €1,000) on all new Golfs through September. Feb-04
• Ford offers $6,000 in additional equipment on Focus (including air conditioning and alloy wheels). This implies a 20% discount to MSRP. Mar-04.
Company data & Morgan Stanley Research
Source:
Countering Deflation
• Lower costs– Materials – 65-70% of the cost of a car
• More efficient use of components• Global sourcing
– Overhead – 15%-25%• Investment efficiency• Supplier Parks
– Labor -10%-20%• Richen mix
Morgan Stanley Research
Source:
Overcoming Deflation; Getting Consumers to Buy Up.
Aug-01 6.41% 57.68 $22,591 ($456) 91.26% $24,754 Sep-01 5.42% 57.20 $23,049 ($458) 92.07% $25,034
Oct-01 2.71% 53.74 $24,443 ($484) 93.86% $26,042
Nov-01 2.89% 51.02 $24,934 ($520) 92.01% $27,099
Dec-01 3.31% 48.57 $24,812 ($547) 90.73% $27,347
Aug-02 2.17% 59.44 $26,455 ($470) 96.83% $27,321
Sep-02 2.29% 58.40 $26,331 ($477) 96.94% $27,162
Oct-03 3.92% 63.52 $26,067 ($455) 93.57% $27,858 Nov-03 3.93% 62.86 $26,306 ($464) 93.72% $28,069
Dec-03 3.56% 61.26 $27,105 ($485) 94.29% $28,746
Jan-04 3.20% 59.91 $27,240 ($493) 93.79% $29,043
Feb-04 3.00% 59.59 $26,296 ($476) 94.33% $27,877
Mar-04 3.51% 59.49 $25,873 ($474) 93.28% $27,737
APR Maturity Financed Amt Payment LTV Implied Cost of Vehicle
FRB & Morgan Stanley Research
Source:
Global Labor Costs vs. Unit Growth
USAGermanyFranceSwedenUKJapanKoreaTaiwanEstoniaTurkeyMexicoPolandMalaysiaRomaniaThailandChinaPhilippinesIndiaIndonesia
1009887806256322716131111
876433
1.5
Labor Cost Indexed to the U.S.
1.9%-1.1%-0.1%7.3%3.1%0.8%5.8%
11.3%NA
30.5%-4.7%7.8%6.6%
10.9%19.5%26.8%19.8%9.6%6.3%
FY01-FY04EProduction Unit CAGR
Autoliv, LMC-JD Power & Morgan Stanley Research
Source:
Global Footprint Migrating To Lower Cost Regions
• Nissan adds 250k in Mississippi FY03• Nissan adds 150k in Mississippi FY04• DCX adds 80k in Alabama FY04• Honda adds 150k in Alabama FY04• Nissan adds 50k in Georgia FY04• Hyundai adds 300k in Alabama FY05• Toyota adds 150k in Texas FY06• Toyota adds 30k in Tijuana, Mexico FY06
N.A. Capacity Additions Mostly in Southern Belt
European Capacity Additions in Eastern Europe/Turkey
• Toyota adds capacity in Czech/Turkey• VW adds capacity 75k in Slovakia• Hyundai adds 200k in Slovakia FY06• PSA adds 300k in Slovakia FY06
Source: Company data & Morgan Stanley Research
Source:
Risks to chasing low cost labor
• Export Strategy Increases Exposure to Currency Fluctuations
• Logistics• Material Supply• Political
Morgan Stanley Research
Source:
Currency Movements Add Risk to Export Strategy
¥100
¥105
¥110
¥115
¥120
¥125
¥130
¥135
Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04
Japanese ¥ vs. US$
Factset & Morgan Stanley Research
Source:
YTD04 Imp % Dom % Import Domestic Wtd Avg Based on Every 1 ¥
OEM* of Total of Total ¥ Content ¥ Content ¥ Content $20,000 Move =
Toyota 37% 63% 100% 24% 52% $10,494 $89
Honda 22% 78% 100% 3% 24% $4,811 $41
Nissan 25% 75% 100% 20% 40% $7,963 $68
Foreign OEMs Exposed to Currency Movements
¥ to US$ Price Sensitivity YTD-04
Company data & Morgan Stanley ResearchIncludes Acura, Infiniti, Lexus
Source:
Japanese Local Production Continues to Increase
30.0%
40.0%
50.0%
60.0%
70.0%9
0 C
Y
91
CY
92
CY
93
CY
94
CY
95
CY
96
CY
97
CY
98
CY
99
CY
00
CY
01
CY
02
CY
03
CY
04
CY
TD
Japanese Transplant Sales as % of Total Sales in U.S.
Autodata & Morgan Stanley Research
Source:
Watch Out for China
Three Reasons Why China Is Important:– China is the 4th largest auto market, and the
fastest growing– High Profitability– Export potential
Morgan Stanley Research
Source:
China Growing Portion of Company Profits
Company Metric China Ops
% (9mos 03) Total Pretax Income
34%
% 3Q03 Total Net Income 17%
% FY03 Total Net Income 15%
China Profits Matter
Company data & Morgan Stanley Research
Source:
Prospects of China Excess Capacity High
• Capacity additions are being announced almost every month, as manufacturers race to establish future market share positions.
• While capacity does not currently appear to be in excess, we estimate that demand will need to grow by roughly 25%-30% per annum to absorb the currently-announced capacity additions over the next three years.
• Recent pricing actions in China a cause for concern.
Company data & Morgan Stanley Research
Source:
Company updates
• Stock performance• Profits• Quality• Market Share• Return on Investment
Morgan Stanley Research
Source:
Why stock price is important
• Industry is a significant user of capital; Cost of capital is a competitive advantage.– Every 1% pt on a five year car loan is worth $700-
$750 per vehicle.
• More efficient users of capital typically have a cost of capital advantage.
Morgan Stanley Research
Source:
Current Bond Yields
GMAC 6.92%
FMCC 6.99%
DCX 6.30%
Toyota Motor Credit
4.35%
Morgan Stanley Research
Source:
Global OEM Market Values
-5,000
15,000
35,000
55,000
75,000
95,000
115,000
135,000
To
yo
ta
DC
X
Nis
sa
n
Ho
nd
a
Fo
rd
BM
W
GM
Re
na
ult
VW
PS
A
Hy
un
da
i
Fia
t
Ta
ta
Kia
Ch
ina
Mo
tors
Bri
llia
nc
e
Global OEM Market Cap in US$
Factset & Morgan Stanley Research
Source:
Global Share Winners
-1.1%
-0.8%-0.8%
-0.6%
-0.4%
0.3%0.4%0.4%
0.6%
1.4%
-0.5%
-1.25%
-0.75%
-0.25%
0.25%
0.75%
1.25% H
yu
nd
ai
To
yo
ta
Ho
nd
a
Re
n-N
iss
an
BM
W
PS
A
VW
Fia
t
GM
DC
X
Fo
rd
Global Share Winners FY01-FY04E
LMC-JD Power & Morgan Stanley ResearchBased on production units
Source:
Global Profitability Winners
11.1%
9.0% 8.7%8.1%
7.4%
6.3%
3.6%3.1% 2.9% 2.9%
0.5% 0.4%-1.1%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Nis
sa
n
Hy
un
da
i
To
yo
ta
BM
W
Ho
nd
a
Kia
PS
A G
rou
p
DC
X
Re
na
ult
VW
GM
Fo
rd
FIA
T
Global Operating Margin LTM as of 1Q04
Company data & Morgan Stanley Research
Source:
Global Automotive Operating Income
-1,500
500
2,500
4,500
6,500
8,500
10,500
12,500
To
yo
ta
Nis
sa
n
Ho
nd
a
BM
W
DC
X
VW
Hy
un
da
i
PS
A G
rou
p
Re
na
ult
GM
Kia
Fo
rd
FIA
T
Automotive Operating Income LTM as of 1Q04 ($ in MM)
Company data & Morgan Stanley Research
Source:
Global Financial Position
-10250
-5250
-250
4750
9750
Ho
nd
a
To
yo
ta
Fo
rd
BM
W
Hy
un
da
i
DC
X
Nis
sa
n
PS
A
Re
na
ult
VW
FIA
T
GM
Industrial Net Debt/(Cash) ($ in MM)
Company data & Morgan Stanley Research
Source:
Off-Balance Sheet Liabilities
GM ($1,116) ($57,544) ($58,660)Ford ($3,447) ($28,797) ($32,244)DCX (€6,400) (€13,400) (€19,800)VW (€11,431) NMF (€11,431) BMW (€3,490) NMF (€3,490)PSA (€1,402) NMF (€1,402)Fiat* (€1,005) NMF (€1,005)Renault (€880) NMF (€880)
Pension Liability Healthcare Liability
Company data & Morgan Stanley Research ( in MM)Fiat FY02 data, 20-F for FY03 not available
Total Liability
Source:
J.D. Power IQS Results 2004
40 60 80 100 120
LexusCadillacJaguarHondaBuick
MercuryHyundai
InfinitiToyota
Mercedes-BenzBMWAudi
OldsmobileVolvoAcura
ChevroletIndustry Average
Problems per 100 Vehicles: Out-performance
JD Power & Morgan Stanley Research
Source:
J.D. Power IQS Results 2004
115 125 135 145 155 165 175
Industry AverageChrysler
DodgeLincolnPontiacSubaru
GMCFord
MitsubishiSaabJeepMini
Land RoverSuzukiSaturn
KiaNissanMazdaScion
PorscheVolkswagen
Hummer
Problems per 100 Vehicles: Under-performance
JD Power & Morgan Stanley Research
Source:
Actual vs. Perceived Quality
-80
-60
-40
-20
0
20
40
Mer
cury
Infi
nit
iB
uic
kL
inco
lnC
hry
sler
Lex
us
Po
rsch
eO
ldsm
ob
iS
aab
Acu
raS
ub
aru
To
yota
Cad
illa
cN
issa
nJe
epS
uzu
kiH
on
da
Fo
rdM
azd
aC
hev
role
tJa
gu
arP
on
tiac
Sat
urn
Do
dg
eIs
uzu
BM
WA
ud
iH
yun
dai
Mit
sub
ish
iM
erce
des
Vo
lvo
VW
Kia
Ran
ge
Actual Quality > Perceived Quality =Share Opportunity
Actual Quality < Perceived Quality =Share Risk
Actual – Perceived Quality Gap
CNW & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
Toyota Asset Turns vs. Margin
2003
2002
2001
1999
2000
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
1.00 1.05 1.10 1.15 1.20 1.25
Asset turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 42.8%
3 Yr: - 4.0%
5 Yr: + 13.7%
Toyota Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
Nissan Asset Turns vs. Margin
20032002
2001
1999
2000
19980.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0.88 0.90 0.92 0.94 0.96
Asset Turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 26.2%
3 Yr: + 38.7%
5 Yr: + 123.1%
Nissan Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
Honda Asset Turns vs. Margin
1999
2001
2000
19982002
2003
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
1.74 1.76 1.78 1.80 1.82 1.84 1.86 1.88
Asset Turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 19.0%
3 Yr: - 11.3%
5 Yr: - 10.0%
Honda Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
GM Asset Turns vs. Operating Margin
1998
1999
2000
2002
20032001
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
1.0 1.1 1.1 1.2 1.2 1.3 1.3 1.4 1.4 1.5
Asset Turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 21.6%
3 Yr: - 19.7%
5 Yr: - 38.0%
GM Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
Ford Asset Turns vs. Margins
1998
2000 1999
2001
2002
2003
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60
Asset Turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 42.1%
3 Yr: - 48.2%
5 Yr: - 60.3%
Ford Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
DCX Asset Turns vs. Margin
1998
2000
1999
1997
1996
1995
2001
2002 2003
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0.75 0.95 1.15 1.35 1.55 1.75 1.95 2.15
Asset Turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 35.0%
3 Yr: - 14.3%
5 Yr: - 56.1%
DCX Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
Volkswagen Asset Turns vs. Margin
2003
2002
2001
1999
2000
1998
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1.30 1.50 1.70 1.90 2.10 2.30 2.50
Asset Turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 15.2%
3 Yr: - 38.4%
5 Yr: - 45.9%
Note: Transitioned to IAS in 2001
Volkswagen Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Source: Company data, Morgan Stanley Research
BMW Asset Turns vs. Margin
2003
20022001
1995 1996
1997
1999
2000
1998
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
1.00 1.20 1.40 1.60 1.80 2.00
Asset Turns
Op
era
tin
g M
arg
in
Stock Performance:
1 Yr: + 19.5%
3 Yr: - 13.6%
5 Yr: + 35.5%
Note: Transitioned to IAS in 2001
BMW Asset Turns vs. Operating Margin
Company data & Morgan Stanley Research
Source:
Summary; Prepare For Change
• Global deflation likely to continue• Consumers will continue to but cars although
where they buy them will change.• Technology will change how cars operate and
how they are put together.• Flexibility is key success factor
Morgan Stanley Research
Source:
Stock Price, Price Target, & Rating History
GM, $45.62, Equal-Weight, Price Target N/A
Morgan Stanley Research
Source:
Disclaimers
Global Stock Ratings Distribution(as of May 31, 2004)Data include common stock and ADRs currently assigned ratings. For disclosure purposes (in accordance with NASD and NYSE requirements), we note that Overweight, our most positive stock rating, most closely corresponds to a buy recommendation; Equal-weight and Underweight most closely correspond to neutral and sell recommendations, respectively. However, Overweight, Equal-weight, and Underweight are not the equivalent of buy, neutral, and sell but represent recommended relative weightings (see definitions below). An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Investment Banking Clients are companies from whom Morgan Stanley or an affiliate received investment banking compensation in the last 12 months.
ANALYST STOCK RATINGSOverweight (O). The stock’s total return is expected to exceed the average total return of the analyst’s industry (or industry team’s) coverage universe, on a risk-adjusted basis, over the next 12-18 months.Equal-weight (E). The stock’s total return is expected to be in line with the average total return of the analyst’s industry (or industry team’s) coverage universe, on a risk-adjusted basis, over the next 12-18 months.Underweight (U). The stock’s total return is expected to be below the average total return of the analyst’s industry (or industry team’s) coverage universe, on a risk-adjusted basis, over the next 12-18 months.More volatile (V). We estimate that this stock has more than a 25% chance of a price move (up or down) of more than 25% in a month, based on a quantitative assessment of historical data, or in the analyst’s view, it is likely to become materially more volatile over the next 1-12 months compared with the past three years. Stocks with less than one year of trading history are automatically rated as more volatile (unless otherwise noted). We note that securities that we do not currently consider "more volatile" can still perform in that manner.Unless otherwise specified, the time frame for price targets included in this report is 12 to 18 months. Ratings prior to March 18, 2002: SB=Strong Buy; OP=Outperform; N=Neutral; UP=Underperform. For definitions, please go to www.morganstanley.com/companycharts.
ANALYST INDUSTRY VIEWSAttractive (A). The analyst expects the performance of his or her industry coverage universe to be attractive vs. the relevant broad market benchmark over the next 12-18 months.In-Line (I). The analyst expects the performance of his or her industry coverage universe to be in line with the relevant broad market benchmark over the next 12-18 months.Cautious (C). The analyst views the performance of his or her industry coverage universe with caution vs. the relevant broad market benchmark over the next 12-18 months.Stock price charts and rating histories for companies discussed in this report are also available at www.morganstanley.com/companycharts. You may also request this information by writing to Morgan Stanley at 1585 Broadway, 14th Floor (Attention: Research Disclosures), New York, NY, 10036 USA.
Coverage Universe Investment Banking Clients (IBC)
Stock Rating Category Count % of Total Count
% of Total IBC
% of Rating Category
Overweight 631 36% 266 41% 42% Equal-weight 787 44% 282 43% 36% Underweight 353 20% 102 16% 28% Total 1,771 650
Morgan Stanley Research
Source:
Important Disclosures
Analyst CertificationThe following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Stephen Girsky.
Important US Regulatory Disclosures on Subject CompaniesImportant US Regulatory Disclosures on Subject Companies
The information and opinions in this report were prepared by Morgan Stanley & Co. International Limited and its affiliates (collectively, "Morgan Stanley").As of April 30, 2004, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in this report: DaimlerChrysler AG, Ford, General Motors.Within the last 12 months, Morgan Stanley managed or co-managed a public offering of securities of DaimlerChrysler AG, Ford, General Motors.Within the last 12 months, Morgan Stanley has received compensation for investment banking services from DaimlerChrysler AG, Ford, General Motors.In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from DaimlerChrysler AG, Ford, General Motors.Within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking services from DaimlerChrysler AG, Ford, General Motors.Within the last 12 months, Morgan Stanley has either provided or currently is providing investment banking services to the following companies covered in this report DaimlerChrysler AG, Ford, General Motors.Within the last 12 months, Morgan Stanley has either provided or currently is providing non-investment banking, securities related services to and/or in the past has entered into an agreement to provide services or currently has a client related relationship with the following companies covered in this report DaimlerChrysler AG, Ford, General Motors.The research analysts, strategists, or research associates principally responsible for the preparation of this research report have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues.
Morgan Stanley & Co. Incorporated makes a market in the securities of Ford, General Motors.
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Other Disclosures
Other Important DisclosuresFor a discussion, if applicable, of the valuation methods used to determine the price targets included in this summary and the risks related to achieving these targets, please refer to the latest relevant published research on these stocks. Research is available through your sales representative or on Client Link at www.morganstanley.com and other electronic systems.
This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The securities discussed in this report may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.
This report is not an offer to buy or sell any security or to participate in any trading strategy. In addition to any holdings disclosed in the section entitled "Important US Regulatory Disclosures on Subject Companies", Morgan Stanley and/or its employees not involved in the preparation of this report may have investments in securities or derivatives of securities of companies mentioned in this report, and may trade them in ways different from those discussed in this report. Derivatives may be issued by Morgan Stanley or associated persons.
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Other Important Disclosures (continued)The value of and income from your investments may vary because of changes in interest rates or foreign exchange rates, securities prices or market indexes, operational or financial conditions of companies or other factors. There may be time limitations on the exercise of options or other rights in your securities transactions. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be realized.
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