European OEMs' 2012 outlooks: German Three and Renault aim for record sales

PSA posts net loss in H1 of 2012, preparing restructure and cost reduction plan

2012/08/24

Summary

 Six European OEMs of PSA, Renault, Fiat, VW and BMW and Daimler sold 11.593 million units in the first half of 2012, up by 3.1% y/y. Despite the slumping European markets, soaring demands in North America, China and Russia and brisk sales of premium cars underpinned their global sales. Especially, the German three of VW, BMW and Daimler achieved the best sales records for the first six month of the fiscal year, respectively. On the contrary, Renault and PSA saw a drop in sales volume in the first half of 2012, because of shrinking European compact car markets. Fiat set off the drop in sales in Europe against an increase in sales in North America by its consolidated company Chrysler.

 In financial aspects, three German OEMs posted record revenue, while BMW and Daimler of the three posted a fall in EBIT due to rising development costs. Fiat enjoyed a drastic increase in sales and EBIT thanks to the effects of the consolidation of Chrysler, while it posted a net loss in the non-consolidated results. Renault and PSA saw a fall in sales volume. As a result, Renault saw a decrease in sales and profit, while PSA saw a net loss and announced the restructuring and cost reduction programs.

 Each of these companies projects that the 2012 global market will continue to expand centering on emerging countries and North America, although European markets will shrink further than the initial forecasts. Three German OEMs continue to aim to refresh the record results of 2011 based on strong performance in the first half. Despite the fall of sales over the first six months, Renault will keep the initial full-year sales target unchanged, which exceeds the record sales of 2011.

Related Reports: Fiat (May 2012), Renault (Jan. 2012), BMW (Nov. 2011)
Mercedes-Benz Cars (Nov. 2011), Daimler's Commercial Vehicle Business (Nov. 2011)

Six European OEMs' 2012 Business Forecasts
PSA  PSA outlooks European markets will stay grim, and shrink by 8% (it was a 5% fall according to the forecast announced in February 2012). By implementing financial improvements such as selling assets in 2012, PSA will constrain the net debt scale to the level at the end of 2012 (2.4 billion Euros).
Renault  In the first half of 2012, sales volume was down by 3.3% y/y, and the free cash flow fell to negative 200 million Euros. However, it keeps the initial targets at sales volume exceeding the 2011 level, and positive free cash flow.
Fiat  Fiat revised the initial sales forecast of 12.90 million - 13.40 million units to 12.70 million units for the European market, while altering the one upward to 14 million units for the US market where the Chrysler has been reporting strong sales.
 Fiat maintains the initial 2012 targets of the entire Fiat-Chrysler Group at sales of more than 77 billion Euros, a trading profit of 3.8 billion to 4.5 billion Euros and a net profit of 1.2 billion to 1.5 billion Euros.
VW  VW sees that global passenger car and light commercial vehicle markets will continue to increase in the second half of 2012, although the growth rate will decelerate from that of the first half, which was 7.5% up y/y. VW expects that sales volume and sales will exceed the 2011 record levels, while aiming for a trading profit unchanged from the previous year.
BMW  BMW aims for a second consecutive record sales volume in 2012, and also targets to have an EBIT surpassing the 2011 record level.
Daimler  Daimler expects the worldwide market will be up by about 4% in 2012, centering on the US and Asia. It plans to bring the Group's sales volume and sales higher than 2011 levels. It set the EBIT target unchanged from 2011.

Six European OEMs' business results
(Euros in millions and global sales units in thousands)
2007 2008 2009 2010 2011 Jan.-Jun.
2011 2012
PSA Global sales volume 3,428 3,260 3,188 3,602 3,549 1,860 1,619
Revenues 58,676 54,356 48,417 56,061 59,912 31,135 29,553
Operating profit 1,752 550 (689) 1,796 1,315 1,157 4
Net profit 885 (363) (1,161) 1,134 588 806 (819)
Renault Global sales volume 2,485 2,382 2,309 2,627 2,722 1,374 1,328
Revenues 40,682 37,791 33,712 38,971 42,628 21,101 20,935
Operating profit 1,354 326 (396) 1,099 1,091 630 482
Net profit 2,734 599 (3,068) 3,490 2,139 1,253 786
Fiat Global sales volume 2,234 2,153 2,152 2,082 4,000 2,063 2,121
Revenues - - 32,684 35,880 59,559 22,363 41,745
Operating profit - - 736 1,112 2,392 776 1,876
Net profit - - (345) 222 1,651 1,274 737
VW Global sales volume 6,190 6,257 6,336 7,203 8,265 4,128 4,552
Revenues 108,897 113,808 105,187 126,875 159,337 77,767 95,378
Operating profit 6,151 6,333 1,855 7,141 11,271 6,086 6,492
Net profit 4,122 4,688 911 7,226 15,799 6,496 8,827
BMW Global sales volume 1,501 1,436 1,286 1,461 1,669 833 901
Revenues 56,018 53,197 50,681 60,477 68,621 33,925 37,495
Operating profit 4,212 921 289 5,111 8,018 4,597 4,402
Net profit 3,134 330 210 3,224 4,907 2,917 2,626
Daimler Global sales volume 2,089 2,073 1,551 1,895 2,111 989 1,072
Revenues 99,399 98,469 78,924 97,761 106,540 51,067 55,895
Operating profit 8,710 2,730 (1,513) 7,274 8,755 4,612 4,373
Net profit 3,985 1,414 (2,644) 4,674 6,029 2,884 2,931
Total Global sales volume 17,926 17,561 16,822 18,871 22,316 11,249 11,593
Revenues - - 349,605 416,025 496,597 237,358 281,001
Operating profit - - 282 23,533 32,842 17,858 17,629
Net profit - - (6,097) 19,970 31,113 15,630 15,088
Note: 1. Global sales volume of Fiat represents those of Fiat Group Automobiles, which do not include that of Chrysler LLC by 2010. After 2011, it includes whole Fiat's and Chrysler's unit sales. Revenue and operating/net profit include those of Chrysler after June 2011. Fiat split off the commercial vehicles/industrial equipment division (Fiat Industrial) in January 2011. The 2009 and 2010 data represent the sales of the passenger car division announced retroactively.
2. VW's global sales include those of Scania which has been consolidated since July 2008, and those of MAN from November 2011.
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