LONDON - Neither of France's two automakers has the typical profile of a company with a high-flying stock. Renault is 44 percent owned by the French government and PSA/Peugeot-Citroen is controlled by its conservative founding family.
Yet the French duo set the standard in the latest Total Shareholder Return survey conducted by Automotive News Europe and PriceWaterhouseCoopers.
The two will be honored tonight (June 19) at the Automotive News World Congress in Montreux, Switzerland, along with four shareholder value champs in the supplier and retail sectors.
Renault achieved the best result among automakers in the three-year period that ended May 31. Its return to investors was 178.4 percent.
Peugeot did best over a one-year period ending on that date - delivering 55.3 percent.
Among Europe-based suppliers Magneti Marelli, returned the most to shareholders in the past year. Veritas, a small German maker of rubber and plastics products, was first in the three-year period.
The three-year retail sector winner was the Dutch distributor Athlon Group. The UK giant Dixon Motors was best over one year.
Automakers have far out-performed suppliers and retailers in financial markets in the survey period. The Automotive News Europe/PricewaterhouseCoopers index for car manufacturers in the year through May 31 showed an industry-wide return of 12.8 percent. The average return over three years was 42.3 percent.
Both the supplier and retail indexes showed negative returns for the past year.
Investors have been impressed by market share gains resulting from PSA's brisk-selling new models, and the company's aggressive stock buyback plan. Periodic speculation about a takeover has also boosted the share price.
Chairman Jean-Martin Folz brought with him a new emphasis on shareholder value when he became CEO in October, 1997 and investors have supported his restructuring strategy.
Three-year winner Renault has been good to shareholders since the company was privatized in July, 1996. A financial recovery followed the launch of successful products and tough cost-cutting measures imposed by former executive vice president Carlos Ghosn.
The continuing success of Renault's Scenic and Kangoo and alliance partner Nissan's better than expected 1999 financial results have also helped keep investors interested.
Magneti Marelli achieved a one-year return of 125.9 percent. That compared with a negative 3.4 percent index for the year for 31 publicly-traded suppliers.
The Italian supplier's share price has benefited from several moves. They include a lighting joint venture with Bosch; entrance into the suspension modules sector; and the sale of some minor businesses.
Magneti Marelli has also expanded into retail repair through its acquisition of the European and South American operations of Midas muffler shops.
Finally, the premium price that Fiat is offering for a buyback of shares, announced in May, had a major impact on the company's stock price. Magneti Marelli's board has approved Fiat's offer for the 30 percent it doesn't already own.
Veritas won the three-year contest with a total return of 219.4 percent. That compares with an industry-wide supplier index of 44.9 percent for 31 suppliers measured over the three-year period. Closely-held Veritas has benefited from strong demand for rubber hydraulic hoses.
UK giant Dixon Motors ranked first among 17 publicly-traded retail businesses in the one-year survey. Dixon returned 74.7 percent to its shareholders. The industry average was negative 10.8 percent.
In March, Britain's third largest car dealership and the UK's largest direct car insurance group, Direct Line, said they would launch an Internet site to sell new and used cars. The announcement triggered a sharp rise in Dixon's share price.
Analysts praise the company for operational innovation, including its Fuel & Go packages that incorporate insurance, servicing and roadside recovery and a new central distribution and administration center.
In the three-year category, the winner was Athlon Group, with a return of 105.2 percent. That was well above the industry average for the period - a negative 14.5 percent.
The Dutch dealer and car leasing company's activities include new and used car sales, repair services and a fleet of lease and rental cars.