European OEMs’ performance and 2016 targets

BMW/Daimler aim for record unit sales; VW seeks to stay on par with prior-year

2016/06/10

Summary

Six European OEMs' unit sales

Six European OEMs' operating profits

 This report outlines six major European OEMs’ 2015 business results, 2016 targets, and midterm strategies.

 The combined 2015 unit sales of the six OEMs (VW Group, BMW Group, Daimler, PSA, Renault, and FCA) amounted to 25.42 million units, up 1.5% year-over-year (y/y). The luxury car makers BMW and Daimler achieved new sales records again and Renault reported a growth of 3.3% in its unit sales. While the sales of PSA and FCA increased slightly, VW, which has been rocked by the fallout from its emissions test misconduct, saw a 2.0% decline. By region, all OEMs reported increased sales in Europe that accompanied an economic upturn. The three German OEMs and FCA also saw boosted sales in North America. In China, where the economy has been slowing, sales grew at a sluggish pace, while sales in Russia and Brazil decreased substantially. Among premium brands, BMW maintained its position as a segment leader while Daimler overtook Audi and almost shared the top position because of a significant increase in sales in China.

 For financial results, VW’s consolidated sales revenue rose by 5.4% y/y to EUR 213.3 billion while its operating losses were EUR 4.1 billion, which includes the EUR 16.2 billion added to deal with its emissions testing misconduct.

 BMW marked record highs with sales revenue of EUR 92.18 billion, up 14.6% y/y, and EBIT of EUR 9.59 billion, up 5.2% y/y. Daimler also reported record revenue and EBIT, with respective increases of 15.1% to EUR 149.5 billion and 22.6% to EUR 13.2 billion.

 PSA’s revenue grew by 6.0% to EUR 54.7 billion. Its operating profit significantly increased from EUR 800 million in 2014 to EUR 2.73 billion with reduced fixed costs. Accordingly, PSA reported a net profit for the year after a net loss the year before. Renault’s revenue also rose by 10.4% to EUR 45.3 billion while its operating profit increased by 44.2% to EUR 2.32 billion through cost cutting. Although FCA’s revenue climbed by 18.1% to EUR 110.6 billion, its EBIT fell by 7.4% to EUR 2.63 billion. Its profits were reduced by the impact of unusual expenses, including those for realignment of its production capacity in North America.

 According to European OEMs’ forecasts for 2016, automotive markets in Europe and North America are expected to grow slightly, and China is expected to maintain an upward trend. At the same time, the Brazilian and Russian markets are projected to shrink. Within this context, the OEMs set their 2016 targets as follows:



2016 targets of Six European OEMs

VW Group VW Group forecasts that the Group’s unit sales in 2016 will be at the same level as the previous year but sales revenue may be down by 5% y/y due to stagnant economies in South America and Russia, negative exchange rates, and the fallout from its emissions testing misconduct. In terms of its operating profit, the Group anticipates an operating return on sales of between 5.0 and 6.0%.
BMW Group BMW Group is aiming to achieve another record for sales volume. The Group’s sales revenue and EBIT are expected to increase slightly. The company’s automotive divisions are expected to have an EBIT margin of between 8.0 and 10.0%.
Daimler Daimler Group expects to achieve further growth in the Group’s unit sales and revenue in 2016. Significant growth is anticipated for the company’s passenger car and van divisions, as well as Asia and Western Europe. However, the rate of growth is likely to be lower than in 2015.
PSA PSA aims to reach an average 4% operating margin for the automotive divisions between 2016 and 2018.
Renault Renault is aiming to increase the Group’s revenue, improve its operating margin, and continue to generate a positive free cash flow for its automotive divisions.
FCA FCA is aiming for Group revenues of EUR 110.0 billion (EUR 110.6 billion in 2015), adjusted EBIT of EUR 5 billion (EUR 4.8 billion), and adjusted net profit of EUR 1.9 billion (EUR 1.7 billion).

Six European OEMs’ business results

(in millions of EUR/in thousands of units for global unit sales)

  2009 2010 2011 2012 2013 2014 2015
VW Global unit sales 6,336 7,203 8,265 9,276 9,731 10,137 9,931
Revenue 105,187 126,875 159,337 192,676 197,007 202,458 213,292
Operating profit 1,855 7,141 11,271 11,498 11,671 12,697 (4,069)
Net profit 911 7,226 15,799 21,884 9,145 11,068 (1,361)
BMW Global unit sales 1,286 1,461 1,669 1,845 1,964 2,118 2,247
Revenue 50,681 60,477 68,821 76,848 76,059 80,401 92,175
Operating profit 289 5,111 8,018 8,275 7,978 9,118 9,593
Net profit 210 3,224 4,907 5,111 5,329 5,817 6,396
Daimler Global unit sales 1,551 1,895 2,111 2,198 2,354 2,546 2,853
Revenue 78,924 97,761 106,540 114,297 117,982 129,872 149,467
Operating profit (1,513) 7,274 8,755 8,820 10,815 10,752 13,186
Net profit (2,644) 4,674 6,029 6,830 8,720 7,290 8,711
PSA Global unit sales 3,188 3,602 3,549 2,965 2,818 2,938 2,973
Revenue 48,417 56,061 59,912 55,446 53,079 51,592 54,676
Operating profit (689) 1,796 1,315 (560) (364) 797 2,733
Net profit (1,161) 1,134 588 (5,008) (2,327) (706) 899
Renault Global unit sales 2,309 2,627 2,723 2,549 2,628 2,712 2,802
Revenue 33,712 38,971 42,628 40,720 40,932 41,055 45,327
Operating profit (396) 1,099 1,091 782 1,242 1,609 2,320
Net profit (3,068) 3,490 2,139 1,712 695 1,998 2,960
FCA Global unit sales 2,152 2,082 3,979 4,223 4,352 4,600 4,610
Revenue - - 59,559 83,957 86,624 93,640 110,595
Operating profit - - 3,467 3,541 3,002 2,834 2,625
Net profit - - 1,651 896 1,951 632 377
Total Global unit sales 16,822 18,871 22,296 23,056 23,846 25,051 25,416
Revenue - - 496,797 563,944 571,683 599,018 665,532
Operating profit - - 33,917 32,356 34,344 37,807 26,388
Net profit - - 31,113 31,425 23,513 25,826 17,698
Source: Press releases and financial statements of the respective OEMs.
(Note) Figures in brackets “( )” represent negative values.