LONDON - After two years of mega-mergers and acquisitions, investors still aren't convinced that bigger means better in the car business.
Instead, they are rewarding small and medium-sized European automakers with limited product and geographical reach more than global giants like Volkswagen and DaimlerChrysler.
PSA/Peugeot-Citroen and Porsche a pair of holdover independents of the kind that some say won't survive on their own created more value for shareholders than other European carmakers in the last three years.
The two finished on top of the first Automotive News Europe/PricewaterhouseCoopers Total Shareholder Return Index. The survey measures the growth in value of an investment over a specific period expressed as a percent. It includes the growth in market capitalization of a company, plus dividends, and assumes that all dividends are invested in additional shares.
PSA and Porsche ranked first and second for the 12-month period ending March 31, with returns of 72.2 percent and 59.2 percent respectively. Porsche led the three-year period through March 31, with a return of 343.5 percent. PSA was next best at 137.5 percent.
The PricewaterhouseCoopers shareholder value index for European automakers overall showed a return of 15.7 percent for the year through March 31 and 50.5 percent over three years.
Size matters little, according to the shareholder value measurements. In Porsche's case, 'The focus on product and not absolute size gives clarity of purpose and vision,' said Francis Drasar, Principal, Corporate Finance and Investor Services at PricewaterhouseCoopers.
Volkswagen, with its six established brands, surging market share and Europe's most comprehensive platform-sharing strategy, has been Europe's worst performer in terms of shareholder value. Its values plummeted 25 percent in the past year and were virtually flat over the three-year period.
DaimlerChrysler was nearly as bad, down 22.7 percent in the 12 months that ended March 31.
Medium-sized BMW and Renault did much better than both, up 43.3 percent and 41.4 percent respectively in the last 12 months, and up 115.9 percent and 57.7 percent over the past three years.
The survey looked at auto companies with at least 40 percent of their unit sales in Europe. That excluded DaimlerChrysler and US giants General Motors and Ford, though DCX and both Americans lagged behind the smaller Europeans in the one-year survey.