European OEMs: 2013 results and 2014 outlook

Record sales in 2013 for German OEMs; PSA and Renault's new management plan

2014/04/02

Summary

 The three German automakers achieved a new sales record and are aiming higher results in 2014. Fiat acquired the remaining shares of Chrysler and established Fiat Chrysler Automobiles (FCA) in January 2014, converting them to the world’s seventh largest automotive company. The French makers have launched their business plans in 2014; Renault plans to further enhance partnership with Nissan to integrate core functions; PSA intends to strengthen their global business. This report outlines the business performance of the six major European automakers in 2013 and also provides their market forecasts as well as their targets and strategies for 2014.

Related Reports:
FCA: Fiat completes full acquisition of Chrysler (Mar. 2014)
Daimler: new models boost car sales to record highs for 2013 (Nov. 2013)
BMW to break sales record in 2013 (Nov. 2013)
VW boosts production in key markets in North America and China (Aug. 2013)
PSA looks to break its dependence on Europe by expanding into emerging markets (Jul. 2013)
FIAT lays out strategy to break-even in Europe by 2016 (Jun. 2013)
Renault strives for positive operating margin for the automotive division (May. 2013)

Highlights of 6 European OEMs

6 Euro OEMs comparison   Total unit-sales in 2013 for all six of the major European auto makers combined, namely PSA、Renault, FCA, VW, BMW,and Daimler, was over 23.83 million units, a year-over-year (y/y) increase of 3.4%. Only PSA, which sold 2.82 million units, reported a y/y sales decline. All of the other makers reported y/y sales increases. In fact, during 2013 all three of the German companies broke their previous global sales records. BMW, for the 9th consecutive year, was the world’s market leader in terms of unit-sales in the premium car market. However, the premium-car leader in the world’s major automotive market, the USA, was Mercedes Benz.
 
 When looking at each company’s business performance in monetary terms, we noted the following. Daimler’s net profit jumped 27.7% y/y, reaching EUR 8.72 billion, and BMW’s net profit rose 4.5% y/y, reaching EUR 5.34 billion. VW reported a tremendous 58.2% y/y drop in net profit to EUR9.15 billion in 2013. However, it should be taken into account that the VW Group’s 2012 business results included a huge profit gained by valuation through acquiring Porsche in the same year. Fiat, after finally acquiring all shares in Chrysler in January 2014, established itself as Fiat Chrysler Automobiles (FCA). In 2013, FCA’s net profit was EUR 1.95 billion. However, if Chrysler’s business results had been excluded, FCA by itself would have ended up EUR 910 million in the red. Renault’s net profit drastically fell 59.4% y/y to EUR 695 million, being negatively impacted by costs associated with cutting its workforce at its facilities in France and withdrawing its business operations from Iran. PSA, the only company to report an operating loss, posted a net operating loss of EUR 2.32 billion, which actually was a 50% reduction in its loss y/y due to successfully adding to and improving its vehicle lineup and reducing costs.

 All of the companies forecast that the automotive market will rise in line with an overall economic recovery in Europe during 2014. They also forecast that markets outside of Europe, such as North America and BRICs, will also see higher demand. However, the actual increase rate in these markets will be slightly less in 2014 than it was in 2013.
  Separately, the forecast for automotive production in France through 2017 by LMC automotive is provided at the end of this report.

2014 Outlook by the Six European OEM

PSA In 2014, demand in Europe will rise 2% and will grow 10% in China. On the other hand, demand in the Latin American market will shrink 2%.
Renault The company predicts that the European market will begin to stabilize in 2014. The company predicts that emerging countries such as China will see growth, however it predicts that there will be a degree of uncertainty in the market
FCA In the NAFTA market, the company sees greater sales in the USA and Canada in 2014; however, the rate of growth will be a lower percentage than that achieved in 2013. Brazil in the Latin American market is predicted to see growth; however, Argentina will see unit sales decline by two digits due to import restrictions. The company forecasts that it will sell a greater number of units in the Asia/Pacific region due to rising demand in China and India. Nevertheless, the company is concerned that unit sales will fall in Japan. As for demand in Europe, the Middle East, and Africa, the company predicts a 3% y/y increase in Italy, and a 4% increase in Germany for 2014. However, growth in Europe as a whole (the 27 EU countries and the EFTA countries), is predicted to increase by only 0.5%, which is basically the same level of business performance as in 2013.
VW In terms of demand in the global passenger-car market, the company says that demand is somewhat recovering in Western Europe, with sales in the German market showing a recovery. The company predicts that demand will be only slightly greater in Central and Eastern Europe. In North America, the company forecasts that the increase in demand seen in 2013 will slow slightly, and that demand will be basically the same level as it was  in South America in 2013. Demand in Asia/Oceania will continue to increase; however the rate of increase will not be as robust as it was in 2013.
BMW The company forecasts that overall demand in the global passenger-car market will recover, growing 4.7% on average y/y. It predicts that demand in the USA will rise 3.6% and that demand in China will rise 10.1%. Even in Europe, the company sees a 1.4% rise in Germany, a 2.8% rise in France, and an 8.7% rise in Italy y/y. The company fears that demand will shrink 13.4% y/y in Japan due to consumption-tax hike. Demand in Brazil is predicted to grow 3.3% and in India, 2.0%.
Daimler Daimler predicts that passenger-car demand in 2014 will rise 4-5% y/y, stating that North America will experience an increase in demand and the economy in Western Europe will recover. As for emerging-market countries, demand will be lower except in China. The company expects that demand for mid-sized and heavy-duty trucks in 2014 will grow 10% at the maximum in the NAFTA market. Even though Euro 6 emission legislation will dampen demand in Europe, the company predicts this lower demand will be offset in proportion to a predicted rise in demand driven by the economic recovery taking place in the region.

Sources: The OEMs' press releases and annual reports

Business results of the Six European OEMs

(in millions EUR / 1,000 unit for global sales volume )
2008 2009 2010 2011 2012 2013 YoY
2012-2013
PSA Global sales volume 3,260 3,188 3,602 3,549 2,965 2,819
(4.9%)
Sales 54,356 48,417 56,061 59,912 55,446 54,090
(2.4%)
Operating profit 550 (689) 1,796 1,315 (560) (177)
Net profit (363) (1,161) 1,134 588 (5,008) (2,317)
Renault Global sales volume 2,382 2,309 2,627 2,723 2,549 2,628
3.1%
Sales 37,791 33,712 38,971 42,628 40,720 40,932
0.5%
Operating profit 326 (396) 1,099 1,091 782 1,242
58.8%
Net profit 599 (3,068) 3,490 2,139 1,712 695
(59.4%)
FCA Global sales volume 2,153 2,152 2,082 3,966 4,209 4,330
2.9%
Sales - 32,684 35,880 59,559 83,957 86,816
3.4%
Operating profit - 736 1,112 2,392 3,541 3,394
(4.2%)
Net profit - (345) 222 1,651 896 1,951
117.7%
VW Global sales volume 6,257 6,336 7,203 8,265 9,276 9,731
4.9%
Sales 113,808 105,187 126,875 159,337 192,676 197,007
2.2%
Operating profit 6,333 1,855 7,141 11,271 11,498 11,671
1.5%
Net profit 4,688 911 7,226 15,799 21,884 9,145
(58.2%)
BMW Global sales volume 1,436 1,286 1,461 1,669 1,845 1,964
6.4%
Sales 53,197 50,681 60,477 68,821 76,848 76,058
(1.0%)
Operating profit 921 289 5,111 8,018 8,275 7,986
(3.5%)
Net profit 330 210 3,224 4,907 5,111 5,340
4.5%
Daimler Global sales volume 2,073 1,551 1,895 2,111 2,198 2,354
7.1%
Sales 98,469 78,924 97,761 106,540 114,297 117,982
3.2%
Operating profit 2,730 (1,513) 7,274 8,755 8,820 10,815
22.6%
Net profit 1,414 (2,644) 4,674 6,029 6,830 8,720
27.7%
Total Global sales volume 17,561 16,822 18,871 22,283 23,042 23,826
3.4%
Sales - 349,605 416,025 496,797 563,944 572,885
1.6%
Operating profit - 282 23,533 32,842 32,356 34,931
8.0%
Net profit - (6,097) 19,970 31,113 31,425 23,534
(25.1%)

Sources: The OEMs' press releases and financial statements.
(Note): Numbers in brackets "(  )" represent negative value.



Highlights of 6 European OEMs

6 Euro OEMs comparison   Total unit-sales in 2013 for all six of the major European auto makers combined, namely PSA、Renault, FCA, VW, BMW,and Daimler, was over 23.83 million units, a year-over-year (y/y) increase of 3.4%. Only PSA, which sold 2.82 million units, reported a y/y sales decline. All of the other makers reported y/y sales increases. In fact, during 2013 all three of the German companies broke their previous global sales records. BMW, for the 9th consecutive year, was the world’s market leader in terms of unit-sales in the premium car market. However, the premium-car leader in the world’s major automotive market, the USA, was Mercedes Benz.
 
 When looking at each company’s business performance in monetary terms, we noted the following. Daimler’s net profit jumped 27.7% y/y, reaching EUR 8.72 billion, and BMW’s net profit rose 4.5% y/y, reaching EUR 5.34 billion. VW reported a tremendous 58.2% y/y drop in net profit to EUR9.15 billion in 2013. However, it should be taken into account that the VW Group’s 2012 business results included a huge profit gained by valuation through acquiring Porsche in the same year. Fiat, after finally acquiring all shares in Chrysler in January 2014, established itself as Fiat Chrysler Automobiles (FCA). In 2013, FCA’s net profit was EUR 1.95 billion. However, if Chrysler’s business results had been excluded, FCA by itself would have ended up EUR 910 million in the red. Renault’s net profit drastically fell 59.4% y/y to EUR 695 million, being negatively impacted by costs associated with cutting its workforce at its facilities in France and withdrawing its business operations from Iran. PSA, the only company to report an operating loss, posted a net operating loss of EUR 2.32 billion, which actually was a 50% reduction in its loss y/y due to successfully adding to and improving its vehicle lineup and reducing costs.

 All of the companies forecast that the automotive market will rise in line with an overall economic recovery in Europe during 2014. They also forecast that markets outside of Europe, such as North America and BRICs, will also see higher demand. However, the actual increase rate in these markets will be slightly less in 2014 than it was in 2013.
  Separately, the forecast for automotive production in France through 2017 by LMC automotive is provided at the end of this report.

2014 Outlook by the Six European OEM

PSA In 2014, demand in Europe will rise 2% and will grow 10% in China. On the other hand, demand in the Latin American market will shrink 2%.
Renault The company predicts that the European market will begin to stabilize in 2014. The company predicts that emerging countries such as China will see growth, however it predicts that there will be a degree of uncertainty in the market
FCA In the NAFTA market, the company sees greater sales in the USA and Canada in 2014; however, the rate of growth will be a lower percentage than that achieved in 2013. Brazil in the Latin American market is predicted to see growth; however, Argentina will see unit sales decline by two digits due to import restrictions. The company forecasts that it will sell a greater number of units in the Asia/Pacific region due to rising demand in China and India. Nevertheless, the company is concerned that unit sales will fall in Japan. As for demand in Europe, the Middle East, and Africa, the company predicts a 3% y/y increase in Italy, and a 4% increase in Germany for 2014. However, growth in Europe as a whole (the 27 EU countries and the EFTA countries), is predicted to increase by only 0.5%, which is basically the same level of business performance as in 2013.
VW In terms of demand in the global passenger-car market, the company says that demand is somewhat recovering in Western Europe, with sales in the German market showing a recovery. The company predicts that demand will be only slightly greater in Central and Eastern Europe. In North America, the company forecasts that the increase in demand seen in 2013 will slow slightly, and that demand will be basically the same level as it was  in South America in 2013. Demand in Asia/Oceania will continue to increase; however the rate of increase will not be as robust as it was in 2013.
BMW The company forecasts that overall demand in the global passenger-car market will recover, growing 4.7% on average y/y. It predicts that demand in the USA will rise 3.6% and that demand in China will rise 10.1%. Even in Europe, the company sees a 1.4% rise in Germany, a 2.8% rise in France, and an 8.7% rise in Italy y/y. The company fears that demand will shrink 13.4% y/y in Japan due to consumption-tax hike. Demand in Brazil is predicted to grow 3.3% and in India, 2.0%.
Daimler Daimler predicts that passenger-car demand in 2014 will rise 4-5% y/y, stating that North America will experience an increase in demand and the economy in Western Europe will recover. As for emerging-market countries, demand will be lower except in China. The company expects that demand for mid-sized and heavy-duty trucks in 2014 will grow 10% at the maximum in the NAFTA market. Even though Euro 6 emission legislation will dampen demand in Europe, the company predicts this lower demand will be offset in proportion to a predicted rise in demand driven by the economic recovery taking place in the region.

Sources: The OEMs' press releases and annual reports

Business results of the Six European OEMs

(in millions EUR / 1,000 unit for global sales volume )
2008 2009 2010 2011 2012 2013 YoY
2012-2013
PSA Global sales volume 3,260 3,188 3,602 3,549 2,965 2,819
(4.9%)
Sales 54,356 48,417 56,061 59,912 55,446 54,090
(2.4%)
Operating profit 550 (689) 1,796 1,315 (560) (177)
Net profit (363) (1,161) 1,134 588 (5,008) (2,317)
Renault Global sales volume 2,382 2,309 2,627 2,723 2,549 2,628
3.1%
Sales 37,791 33,712 38,971 42,628 40,720 40,932
0.5%
Operating profit 326 (396) 1,099 1,091 782 1,242
58.8%
Net profit 599 (3,068) 3,490 2,139 1,712 695
(59.4%)
FCA Global sales volume 2,153 2,152 2,082 3,966 4,209 4,330
2.9%
Sales - 32,684 35,880 59,559 83,957 86,816
3.4%
Operating profit - 736 1,112 2,392 3,541 3,394
(4.2%)
Net profit - (345) 222 1,651 896 1,951
117.7%
VW Global sales volume 6,257 6,336 7,203 8,265 9,276 9,731
4.9%
Sales 113,808 105,187 126,875 159,337 192,676 197,007
2.2%
Operating profit 6,333 1,855 7,141 11,271 11,498 11,671
1.5%
Net profit 4,688 911 7,226 15,799 21,884 9,145
(58.2%)
BMW Global sales volume 1,436 1,286 1,461 1,669 1,845 1,964
6.4%
Sales 53,197 50,681 60,477 68,821 76,848 76,058
(1.0%)
Operating profit 921 289 5,111 8,018 8,275 7,986
(3.5%)
Net profit 330 210 3,224 4,907 5,111 5,340
4.5%
Daimler Global sales volume 2,073 1,551 1,895 2,111 2,198 2,354
7.1%
Sales 98,469 78,924 97,761 106,540 114,297 117,982
3.2%
Operating profit 2,730 (1,513) 7,274 8,755 8,820 10,815
22.6%
Net profit 1,414 (2,644) 4,674 6,029 6,830 8,720
27.7%
Total Global sales volume 17,561 16,822 18,871 22,283 23,042 23,826
3.4%
Sales - 349,605 416,025 496,797 563,944 572,885
1.6%
Operating profit - 282 23,533 32,842 32,356 34,931
8.0%
Net profit - (6,097) 19,970 31,113 31,425 23,534
(25.1%)

Sources: The OEMs' press releases and financial statements.
(Note): Numbers in brackets "(  )" represent negative value.

 



PSA halves operating loss in 2013 and reveals new management plan

 Including CKD kits, the PSA Group sold 2,891,000 units worldwide in 2013, which was a 4.9% decrease y/y. The major causes for the decrease include the drop in unit sales in Europe and a cease in exports of CKD kits that had been sent to Iran. The result was a 7.3% y/y drop in unit sales in Europe, where the company sold 1.63 million units. The export volume of CKD kits fell drastically, by 99.3%, with the company exporting only 1,000 units in total. On the other hand, the company increased its unit sales in China by 26.0% y/y, selling 557,000 units, seeing strong sales of its models such as Peugeot 3008, 301, and Citroen C4L. The company’s unit sales outside the European region accounted for 38% of its total sales in 2012, but that percentage grew to 42% in 2013.
 
 In 2013, the company’s sales revenue in euro fell 2.4% y/y, to EUR54.09 billion, with the automotive division recording a 4.8% drop y/y and EUR36.46 billion in sales. The company reduced its operating loss 68.4% y/y, reporting a loss of EUR177 million, while its automotive division reported an operating loss of EUR1.04 billion, which was a 30.3% y/y reduction. The company reduced its net loss by half, to EUR 2.32 billion.
 
 In March 2014, PSA signed a global strategic partnership agreement with Dongfeng motor group (DFG). PSA increased its capital in DFG by EUR 3 billion. DFG, and French government each invested EUR 800 million and own 14% stake, which is the equal share to the Peugeot family. Also, PSA, DFG, and Dongfeng-Peugeot-Citroen Automobile (DPCA), a joint venture between the two companies are scheduled to build 1.50 million units annually by 2020, to open an R&D technical center in China and to actively strengthening its sales network.

PSA's global sales by region

(1,000 units )
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Europe 2,231 2,159 2,195 2,063 1,758 1,629 (7.3%)
Russia 59 41 56 75 78 61 (21.8%)
Latin America 263 232 294 326 283 303 7.1%
China 179 272 376 404 442 557 26.0%
Others 219 142 204 224 259 268 3.5%
Total cars 2,952 2,845 3,125 3,092 2,820 2,818 (0.1%)
Total CKD 309 342 477 458 145 1 (99.3%)
Global sales 3,260 3,188 3,602 3,549 2,965 2,819 (4.9%)

Sources:PSA Full Year Results
(Notes) 1. PSA has suspended its CKD shipments to Iran since February 2012.
2.Numbers in brackets "(  )" represent negative value.

 

PSA's consolidated business results

(in millions EUR)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Sales 54,356 48,417 56,061 59,912 55,446 54,090 (2.4%)
of which automotive division 41,643 38,265 41,405 42,710 38,299 36,461 (4.8%)
Recurring operating income 550 (689) 1,796 1,315 (560) (177)
of which automotive division (225) (1,257) 621 (92) (1,496) (1,042)
Net profit (363) (1,161) 1,134 588 (5,008) (2,317)
Sources:PSA Full Year Results
(Note) Numbers in brackets "(  )" represent negative value.

 

PSA's target and Management Plan "Back in the Race"(Released Feb. 2014)

Management Objective:
"Back in the Race"
・In 2014, the company will enhance its management to achieve a positive free-cash flow by 2016. (Previously, the company had set 2015 as the year in which it would achieve a positive free cash flow and gain equilibrium on its balance of payments.)
4 Main Strategies 1) To identify elements that can differentiate each of its brands; and set appropriate product pricing:
 ⇒The company will work to establish its DS-Line as an independent, premium brand; and set appropriate pricing for each of its three brands (Peugeot, Citroen, DS-Line).
2) To develop stronger strategies for improving its model lineup:
 ⇒Develop and launch vehicle models in segments where the company can expect to earn the greatest profits. Also, conduct R&D and investment activities on a global scale. 
3) Globalization: To increase the percentage of its profit base in regions outside Europe:
 ⇒Develop vehicle model ranges that better fit the needs of local markets in Russia, Central & South America, and China.
 ⇒Continue developing vehicles for post-BRICs markets, and boost sales outside these countries.
4) To strengthen its European operations:
 ⇒Cutting costs such as part supplies, and reducing fixed costs
 ⇒Upgrading its facilities in Eastern Europe to raise its competitive strengths.
(Note): In April 2014, the company is planning to announce further details to investors.



Renault sets new goal to achieve sales revenue of EUR 50 billion by 2017

 In 2013 Renault sold 2.63 units worldwide, which was a 3.1% increase y/y. Taking a look at the company’s sales breakdown by brand, we noted the following. Renault sold 2.13 million units, which was a 0.4% y/y increase; and Renault-Samsung’s unit sales increased 1.5% y/y, totaling 670,000 units, which was hardly any increase at all. However, Dacia sold 430,000 units, which was a 19.4% increase y/y, thanks to robust sales of its Duster, Logan、Sandero and others.

 Looking at sales performance by market, the company sold 1.30 million units in Europe, achieving a 2.4% y/y increase due to strong sales of its new version Clio and Captur. In the Americas, the Clio、Duster、and Sandero proved to be popular with buyers. As a result, the company increased its unit sales 3.5% y/y, to 467,000 units. In the Asia-Pacific region, unit sales increased in both India and Korea, for example, with the number of units sold in the region totaling 238,000 units. When sales in Iran are not factored in, total sales for the region showed an increase of 28.9% y/y. However, when sales results for Iran are included, the 2013 business results for the region as a whole were 7.8% lower y/y, which resulted from the company withdrawing its business from Iran in July 2012.

 Financial results in monetary terms for 2013 are as follows. Sales revenue, which was EUR40.93 billion, increased slightly, by 0.5%. Operating profit grew 58.8% y/y, to EUR1.24 billion, thanks to greater sales of Dacia-branded vehicles and effective cost-cutting initiatives. However, net profit was EUR695 million, a 59.4% y/y decrease, which was mainly the result of expenses incurred in France where the company initiated large-scale reorganization measures, and in Iran where the company incurred huge costs associated with the withdrawal of its operations from the country. In addition, EUR1.5 billion in equity profits from Nissan are included in its 2013 net income.

Renault's global sales volume by brand and region

(units in thousands)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Renault 2,019 1,861 2,116 2,261 2,123 2,131
0.4%
Dacia 258 311 350 343 360 430
19.4%
Renault-Samsung 104 136 162 118 66 67
1.5%
Worldwide 2,382 2,309 2,627 2,723 2,549 2,628
3.1%
Europe 1,508 1,530 1,644 1,550 1,271 1,302
2.4%
Eurasia 130 80 106 171 208 232
11.5%
Americas 255 228 317 397 451 467
3.5%
Euromed-Africa 489 471 560 346 361 389
7.8%
Asia-Pacific 259 258 238
(7.8%)
Sources: Renault earnings reports
(Notes)1. Figures excluding the Russian AvtoVAZ Lada brand
2. "Europe" includes Western and Central Europe. "Euromed" includes Romania, Bulgaria and other Eastern European countries as well as Turkey and North Africa. "Eurasia" includes Russia and the CIS. "Asia-Africa" includes Oceania and the Middle East.
3. Numbers in brackets "(  )" represent negative value.

 

Renault's consolidated business results

(in millions EUR)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Revenues 37,791 33,712 38,971 42,628 40,720 40,932 0.5%
Operating margin 326 (396) 1,099 1,091 782 1,242 58.8%
Net income 599 (3,068) 3,490 2,139 1,712 695 (59.4%)
Sources: Renault earnings annual reports
(Note) Numbers in brackets "(  )" represent negative value.

 

Renault's targets and strategies

2014 Objectives Renault is aiming to increase both unit sales and revenue, to improve the operating profit of its automotive division, and to maintain a positive free cash flow (2013: EUR 827 million)
Renault and Nissan Consolidate 4 functions   In March 2014, Renault announced a new plan that it would initiate from April 2014. Under the plan, Renault and Nissan will consolidate four of their functions, namely R&D, production, parts procurement, and human resources, aiming to achieve cost reductions of EUR4.3 billion by 2016 from the synergy effect. (As for 2012, EUR 2.69 billion)
R&D The company is consolidating the development and advanced development of common module families (CMFs), the development of powertrains (including EVs), and systems development. In addition, it is consolidating testing facilities and testing functions.
Production technology; logistics The following functions will be consolidated: global production strategy (including sourcing), production process technology, production control, supply-chain management
Parts procurement By consolidating parts procurement, the company predicts that it will reduce costs and gain a huge synergy effect made possible by purchasing on an even greater scale.
Human resources The company plans to standardize processes, including implementing common HR policies globally for both companies.
Management Plan: renewing “Drive The Change” ・Aiming to achieve sales revenue of EUR50 billion by 2017 (2013: EUR40.9 billion).
・Achieving a profit margin of 5% or higher, and making sure to maintain a positive cash flow every year.
・By 2016, raising the ratio of platform sharing to 80% within the Group/ Nissan Alliance, and modularizing 65% of the content ratio. (It currently stands at 35%.)
・Raising local procurement ratio of parts in BRICs to 80% by 2016.
・By 2016, achieving 100% operating capacity at the Renault/Nissan Alliance and partner companies at European facilities.
・Significantly improving its model lineup by launching entry-level models in A segment designed for sale in emerging-market countries; by releasing all-new models of the Twingo and Trafic Van in the fall of 2014; and by launching B-D segment SUVs including the Espace, Megane, and Scenic.

 



Fiat completely acquires Chrysler and forms FCA (Fiat Chrysler Automobiles)

 In 2013 FCA sold 4.33 million units worldwide, which was a 2.0% increase y/y. In North America, the company sold 2.24 million units, a 5.8% y/y increase, which was driven by strong sales of the Jeep Grand Cherokee, the Ram 1500 Pickup Truck and others. In the Asia/Pacific region, the company saw unit sales increase 58.3% y/y to 163,000 units. This was attributed to strong sales of Jeeps, as well as robust sales of the Fiat Viaggio, which is being built in China. In Europe, sales fell 3.3% y/y, to 979,000 units, while sales fell in South America 3.0% y/y. However, these sales declines were offset by the favorable performance in North America, Asia and Pacific.
 
 2013 sales revenue was EUR 86.82 billion, a 3.4% y/y increase. Operating profit was down 4.2% y/y to EUR 3.39 billion, impacted by huge increases in both production costs and capital-investment costs for facilities and equipment. Net profit, which was EUR 1.95 billion, was up 2.2 fold y/y. However, when looking at Fiat’s results only, Fiat posted a stand-alone loss of EUR 910 million, clearly indicating that Chrysler contributes a significant amount to the overall business performance of FCA.

FCA's global unit sales by region

(1,000 unit )
2011 2012 2013 YoY 2012-
2013
2014
Plan
North America 1,783 2,115 2,238
5.8%
~2,400
Europe/Others 1,180 1,012 979
(3.3%)
~1,000
South America 929 979 950
(3.0%)
900~1,000
Asia/Pacific 74 103 163
58.3%
~200
Total 3,966 4,209 4,330
2.9%
4,500~4,600
Sources: Fiat Group Annual Reports
(Notes)1. 2011 unit sales data include Chrysler's sales since January 2011.
2. Numbers in brackets "(  )" represent negative value.

 

FCA's consolidated business results

(in millions EUR)
2009 2010 2011 2012 2013

YoY 2012-
2013

2014
(Plan)
Net revenues 32,684 35,880 59,559 83,957 86,816 3.4% ~93,000
Trading profit 736 1,112 2,392 3,541 3,394 (4.2%) 3,600~4000
Trading margin 2.3% 3.1% 4.0% 4.2% 3.9% (0.2%pts)
Profit/loss of the year (345) 222 1,651 896 1,951 117.7% 600~800
Sources: Fiat Group Annual Reports、
(Notes)1. Numbers in brackets "(  )" represent negative value.
2. Chrysler's performances since June 2011 are included in the data

 

FCA target and plans:

2014 Plans ・In 2014 Fiat is aiming to achieve sales revenue of EUR 93.0 billion (a 7% y/y increase), operating profit somewhere between EUR 3.6-4.0 billion, and a net profit from between EUR 600 to 800 million.
New models

・The company plans to launch sales of the Chrysler 200 in the first half of 2014, which is being built at its plant in Sterling Heights, Michigan, in the USA.
・In China the company plans to release the Fiat Viaggio hatchback and Fiat Ottimo in the early part of 2014, and the Jeep Cherokee at the end of the year.
・In the latter half of 2014, the company plans to launch its Fiat 500X in Europe.

Total buyout of Chrysler completed In January 2014 Fiat acquired the remaining 41.5% shares of outstanding stock held in Chrysler by VEBA, the voluntary employees' beneficiary association for retired United Auto Workers, paying USD4.35 billion. After the acquisition, the company was named Fiat Chrysler Automobiles (FCA), registered in the Netherlands. FCA domiciled in the UK for tax purposes.





VW expects 10 million unit sales in 2014

 In 2013 VW broke all previous sales records, selling 9.73 million units, which was a 4.9% y/y increase. The sales breakdown by brand is as follows. VW itself sold 5.93 million units (3.4% y/y increase), Audi sold 1.58 million units (8.1% y/y increase), SEAT sold 355,000 units (10.6% y/y increase), and Skoda sold 921,000 units (1.9% y/y decrease). The reasons for the y/y decrease in Skoda sales stem from the sluggish economy in general; and the facelift that the company did in the first half of 2013 on the Octavia, a popular vehicle model, which especially affected sales. All the other brands, including Porsche, Bentley, Lamborghini, and Bugatti, sold 175,000 units combined, which was slightly less than 2.5 times the previous year’s sales volume.

 The following is VW’s sales breakdown by market region. Sales in China were up 16.2% y/y, to 3.27 million units, surpassing those in Western Europe. Sales in Western Europe were basically at the same level as they were in 2013, slightly decreasing 0.3% y/y, to 3.08 million units. In South America, the company sold 993,000 units, which was an 8.2% y/y decrease. As a result, the company’s market share in South America, which had been 19.5% in 2012, fell to 17.0% in 2013.  

 In terms of sales in euros in 2013, the company’s sales revenue was EUR197.07 billion, a 2.2% y/y increase; and operating profit increased 1.5% y/y, to EUR11.67 billion, which was a new sales record for the company. However, net income before taxes dropped 51.2% y/y to EUR12.43 billion; and net income after taxes fell 58.2% y/y to EUR9.15 billion. On the surface, these results would seem to indicate a huge deterioration in business performance. However, 2012 sales figures reflect a huge valuation profit (EUR12.3 billion) that the company gained from acquiring Porsche, and which was recorded in its 2012 results.

VW's global sales by brand and region

(1,000 units )
2008 2009 2010 2011 2012 2013 YoY
2012-2013
VW 3,668 3,954 4,503 5,091 5,738 5,932 3.4%
Audi 1,003 950 1,092 1,304 1,457 1,575 8.1%
Skoda 675 684 763 879 939 921 (1.9%)
SEAT 368 337 340 350 321 355 10.6%
Others 10 6 6 8 70 175 150.0%
Commercial vehicles 502 362 436 529 550 552 0.4%
Scania 31 43 64 80 67 81 20.9%
MAN - - - 25 134 140 4.5%
Global sales 6,257 6,336 7,203 8,265 9,276 9,731 4.9%
Western Europe 2,989 2,918 2,903 3,168 3,092 3,083 (0.3%)
Central/Eastern Europe 560 385 430 563 672 668 (0.6%)
North America 503 468 550 668 843 891 5.7%
South America 803 826 908 963 1,082 993 (8.2%)
Asia/Pacific 148 150 221 316 365 376 3.0%
China 1,024 1,401 1,925 2,260 2,815 3,271 16.2%
Other Regions 228 189 268 327 407 449 10.3%
Sources: VW Annual Reports
(Notes)1. "Other brands" are Bentley, Lamborghini, Bugatti and Porsche. "Commercial vehicles" are all VW brand, excluding MAN and Scania.
2. Includes MAN's value effective November 9, 2011.
3. Includes Porsche's value since August 2012 in "Other Brands".
4. Numbers in brackets "(  )" represent negative value.

 

VW Group's consolidated business results

(in millions EUR)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Sales revenue 113,808 105,187 126,875 159,337 192,676 197,007 2.2%
Operating profit 6,333 1,855 7,141 11,271 11,498 11,671 1.5%
Profit before tax 6,608 1,261 8,994 18,926 25,487 12,428 (51.2%)
Profit after tax 4,688 911 7,226 15,799 21,884 9,145 (58.2%)
Sources: VW Annual Reports
(Notes)1. Financial Service department is included in "Revenue" and "Profit"
2. VW has consolidated Porsche since August 1, 2012 and MAN SE since November 2011.
3. Profit before tax for 2010-2012 includes remeasurement of Porsche options
4. Numbers in brackets "(  )" represent negative value.

 

VW's 2014 plan

2014 Plan ・In 2014, VW is aiming to achieve sale revenue that is around 3% higher y/y,  even after taking currency translation into account.
・The company predicts that it will sell 10 million units worldwide for the year.
・Return on Sales (RoS) are forecast to be between 5.5% and 6.5%.
・Between 2014 and 2015, the company is planning to launch 100 either new or remodeled vehicle such as the new Pasaat, Audi A4, Q7, Porsche Macan, Plug-in hybrid version of the Porsche Cayenne, Skoda Fabia, Skoda Superb, SEAT Ibiza, etc.

 

 



BMW predicts increase in unit sales and operational profit in 2014

 The BMW Group in 2013 sold 1.96 million units worldwide, which was a 6.4% y/y increase and a new sales record for the company. In fact, every brand in the BMW Group achieved record sales. Thanks to strong sales of the popular BMW X1, 3 Series, and 5 Series models, the BMW brand sold 1.66 million vehicles, achieving a 7.5% y/y increase. The MINI brand sold 305,000 units, which was a 1.2% y/y increase. And Rolls-Royce sold 3,600 units during the year.

 Taking a look at results by sales region, the number of units sold in Asia during 2013 surpassed 500,000 for the first time. The region sold 579,000 units, which was a y/y increase of 17.3%. In fact, more units were sold in China than in the USA, which is the biggest auto market in the world. A total of 392,000 units were sold in China alone, which amounted to a 19.7% y/y increase and was a huge rise in volume. Sales in Americas were up 9.1% y/y, to 464,000 units, with 377,000 units sold in the U.S., an 8.1% y/y increase. In BMW’s home country of Germany, however, the company sold 259,000 units, which was a 9.8% y/y decrease.

 As for BMW, total sales revenue in 2013 was EUR 76.06 billion, a 1.0% y/y decrease, which was the result of negative currency translation and other factors. Operating profit (EBIT) was down 3.5% y/y (EUR7.99 billion), impacted by expenses incurred for investments that the company made in new technology and in facilities and equipment. In the end, however, net income grew 4.5% y/y to EUR 5.34 billion.


BMW's global sales by brand and region

(units)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
BMW 1,202,239 1,068,770 1,224,280 1,380,384 1,540,085 1,655,138
7.5%
MINI 232,425 216,538 234,175 285,060 301,526 305,030
1.2%
Rolls-Royce 1,212 1,002 2,711 3,538 3,575 3,630
1.5%
Total 1,435,876 1,286,310 1,461,166 1,668,982 1,845,186 1,963,798
6.4%
Germany 280,900 267,500 267,200 285,300 287,400 259,200
(9.8%)
United Kingdom 151,500 137,100 154,800 167,500 174,500 189,100
8.4%
Rest of Europe 432,200 357,300 369,200 405,600 403,500 411,200
1.9%
Americas 355,400 294,200 329,700 380,300 425,300 463,800
9.1%
 of which USA 303,600 242,100 266,600 306,300 348,500 376,600 8.1%
Asia 165,700 183,200 286,300 375,500 493,400 578,700
17.3%
of which China 65,900 90,600 183,328 233,630 327,300 391,700 19.7%
Others 50,200 47,000 54,000 54,800 61,100 61,800
1.1%
Sources :Annual Reports
(Note): Numbers in brackets "(  )" represent negative value.

 

BMW's consolidates results

(in millions EUR)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Production volume
(unit)
1,439,918 1,258,417 1,461,253 1,738,160 1,861,826 2,006,366
7.8%
Revenues 53,197 50,681 60,477 68,821 76,848 76,058
(1.0%)
EBIT 921 289 5,111 8,018 8,275 7,986
(3.5%)
Pretax profit 351 413 4,836 7,383 7,803 7,913
1.4%
Net profit 330 210 3,224 4,907 5,111 5,340
4.5%
Sources:Annual Reports
(Note): Numbers in brackets "(  )" represent negative value.

 

BMW's 2014 plan

2014 targets and plans ・In 2014 BMW intends to achieve a new sales record by selling more than 2 million units, and regaining its title as the number one auto maker in every premium car market. In addition, the company is aiming to surpass the operating profit it achieved in 2013.
・In 2014 the company is planning to launch 16 either new or remodeled vehicles such as the BMW 2 Series Coupe, BMW X3, X4, MINI, Rolls-Royce Ghost II, etc.
・Sales revenue in the automotive division is expected to rise y/y as a result of new vehicle-model launches in the latter half of 2014.
・The company plans to boost the production capacity at its plant in Spartanburg, the U.S. (The plant built 300,000 units in 2012.)
・The plant in Araquari, Brazil is scheduled to come on line in the fall of 2014. The company invested EUR 200 million in the plant, which is forecast to build 30,000 units annually.
・In China, where the company raised its production capacity in 2013 to 300,000 units, the company now is considering increasing its production capacity even further, to 400,000 units.
・At VDL NedCar’s plant in the Netherlands, the production launch of the new MINI is scheduled to commence in the summer of 2014, under an outsourcing agreement.

 



Daimler foresees rise in unit sales and revenue with launch of new models

  Mercedes-Benz Cars, which is Daimler’s passenger-car unit, sold 1.57 million units worldwide in 2013, which resulted in a y/y increase of 7.9% and a new sales record for the company. Unit sales by region are as follows. Overall sales in Western Europe were up 1.4% y/y, for a total of 640,000 units. In Germany, sales were lower 3.5% year-over-year, down to 280,000 units. Sales in the UK grew 12.3% y/y, to 114,000 units. In Belgium, the company enjoyed strong sales y/y by 14.7%, selling 26,000 units. As can be seen by these results, it was actually the company’s strong sales in countries outside of Germany in Europe that supported the company’s total y/y increase in sales. And in the U.S., for the second year in a row, unit sales exceeded those in Germany, or Mercedes own home country. Sales in the U.S. rose 6.3% y/y, totaling 319,000 units. Sales in China grew 14.5% y/y, reaching 239,000 units. One reason for the higher sales at Daimler during 2013 was due to the improved vehicle lineup in the compact car segment such as the A Class and the CLA Class.

 Daimler’s 2013 business performance is as follows. Sales revenue increased 3.2% y/y  to EUR117.98 billion; and its EBIT increased 22.6%, to EUR10.82 billion, which was a new record for the company in terms of earnings. Looking at Daimler’s automotive division’s results, the EBIT for 2013 were lower by 8.8%, down to EUR4.01 billion, which was due to higher expenses reported for developing new vehicle models and new technology, and enhancing and revamping its production operations.

 Daimler predicts that its business results in terms of both unit-sales and sales revenue will improve in 2014 as a result of its efforts to launch new models such as the C-Class and strengthening both its production operations and sales structure in emerging countries.

Mercedes-Benz Cars' sales by region (on a wholesale basis)

(units)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Western
Europe
733,233 623,489 635,798 625,168 631,423 640,162 1.4%
of which
Germany
332,472 297,756 292,895 290,658 289,923 279,894 (3.5%)
of which other
countries in
Western Europe
400,761 325,733 342,903 334,510 341,500 360,268 5.5%
US 251,160 202,955 220,454 250,355 299,741 318,507 6.3%
Asia 144,141 138,942 261,568 335,449 338,286 389,065 15.0%
of which China 48,620 67,451 159,974 223,059 208,494 238,727 14.5%
Others 144,479 128,519 159,007 170,444 182,119 217,829 19.6%
Total 1,273,013 1,093,905 1,276,827 1,381,416 1,451,569 1,565,563 7.9%
Sources: Daimler Annual Reports
(Note): Numbers in brackets "(  )" represent negative value.

 

Daimler AG's consolidated results

(in millions EUR)
2008 2009 2010 2011 2012 2013 YoY
2012-2013
Production volume
(Units in thousands)
2,150 1,456 1,941 2,137 2,195 2,384 8.6%
Sales volume
(Units in
thousands)
Passenger cars 1,273 1,094 1,277 1,381 1,452 1,566 7.9%
Commercial vehicles 800 457 619 730 746 788 5.6%
Total 2,073 1,551 1,895 2,111 2,198 2,354 7.1%
Revenues Passenger cars 47,772 41,318 53,426 57,410 61,660 64,307 4.3%
Commercial vehicles 42,859 28,813 36,394 42,348 44,388 44,947 1.3%
Total 98,469 78,924 97,761 106,540 114,297 117,982 3.2%
EBIT Passenger cars 2,117 (500) 4,656 5,192 4,391 4,006 (8.8%)
Commercial vehicles 368 (792) 1,998 2,873 2,023 2,392 18.2%
Total 2,730 (1,513) 7,274 8,755 8,820 10,815 22.6%
Net profit 1,414 (2,644) 4,674 6,029 6,830 8,720 27.7%
Sources: Daimler Annual Reports
(Notes):1. Data of passenger cars are from Mercedes-Benz Cars and data of commercial vehicles are the total of Daimler Trucks, Mercedes-Benz Vans and Daimler Buses.
2. "Totals" of revenues and EBIT include the data of Financial Services division.
3. Numbers in brackets "(  )" represent negative value.
4. EUR 3.19 billion resulted from the revaluation and the sale of the shares of EADS in April 2013 is included in 2013.

 

Daimler Group's outlooks for 2014

2014 Outlook ・Mercedes-Benz Cars predicts that its unit-sales in 2014 will surpass those in 2013 as a result of its plans to launch an S-Class and C-Class sedans, compact cars such as the GLA class, and the C-Class wagon that it is scheduled to release in the latter half of 2014.
・Mercedes-Benz Vans predicts that in 2014 it will sell more units than it did in 2013, with sales of its all-new models of the Sprinter, Vito, V-Class, and Citan contributing to its business performance. In addition, the company is planning to expand its market presence in North America, South America, and China.
・Daimler Trucks foresees a drop in demand in the earlier part of 2014. However, the company sees unit-sales growing for the year in line with the economic recovery in Europe. While it predicts that unit-sales in Brazil for the year will be slightly lower y/y, it predicts that it will continue to sell even more units y/y in North America, as it did in 2013. In Asia, it expects unit-sales to grow also, supported by the launch of new models being built by BharatBenz in India.
・Daimler Buses expects that in 2014 it will sell more buses in the GVW(Gross Vehicle Weight) 8-ton class and larger in line with its launch of new-model buses. In terms of sales by region, it foresees greater sales in Europe and Brazil.
・Daimler predicts its sales revenue in 2014 will be higher y/y, driven by sales of new models it launched in 2013 as by launch of new models in 2014. In addition, it sees higher y/y business performance in Asia, Eastern Europe, and South America. The company expects the EBIT of both Mercedes-Benz Cars and Daimler Trucks to be significantly higher y/y, while Daimler Buses expects its EBIT will be only slightly higher and Mercedes Benz Vans forecasts to have a similar EBIT as 2013.

 

 



Production Forecast by LMC Automotive: French Light vehicle Production Forecast

(LMC Automotive、February 2014)

LMC French forecast 2017  According to LMC Automotive’s forecast, Light vehicle production in France will increase to 1.81 million units in 2014, increasing by 6.2% compared to the previous year. The production volume then slightly declines to 1.7 million unit level through 2015 to 2016. In 2017 the volume recovers back to 1.89 million units. Even though the production volume shows some recovery, 2017 is 17.4% lower compared to 2011 which had 2.29 million units produced.

 When the light vehicle production is looked by each sales group, PSA and Renault-Nissan are expected to increase their total production volume in 2017 compared with 2013. PSA group will show a slight increase of 3.6% o 948,343 units. Renault-Nissan group will show a big rise in the production volume since “Flins [plant] will receive a boost…as [the group will transfer the] production of the next [Nissan] Micra from India to the French plant.”  Total volume will increase to 641,525 units, increasing by 154,276 units from 2013 which Nissan vehicles total about 10.7% of the volume.
 
 The production in France seems to be recovering gradually; however when compared with 2011, both PSA and Nissan-Renault do not reach back to their past volume. LMC Automotive comments “capacity utilization in France is currently running at only 45% and despite Aulnay’s closure in 2014, capacity utilization will struggle to get above 50% without further restructuring.”

Light vehicle production in France by make

Sales Group Global Make 2011 2012 2013 2014 2015 2016 2017
Total 2,294,761 1,975,533 1,704,877 1,810,810 1,751,451 1,725,414 1,894,919
Daimler Group Mercedes-Benz 0 14,089 17,736 19,491 20,970 21,423 21,084
Smart 103,635 104,154 99,970 84,542 104,201 108,217 108,680
Daimler Group Total 103,635 118,243 117,706 104,033 125,171 129,640 129,764
Fiat Chrysler Automobiles Fiat 19,786 15,206 13,416 13,095 12,139 10,974 0
General Motors Group Opel 0 0 0 0 0 0 21,615
PSA Group Citroen 565,534 494,335 391,426 391,335 372,516 324,272 356,835
Peugeot 791,637 622,225 524,206 637,607 597,987 585,730 591,508
PSA Group Total 1,357,171 1,116,560 915,632 1,028,942 970,503 910,002 948,343
Renault-Nissan Group Nissan 0 0 0 6,184 9,055 25,789 69,125
Renault 646,308 531,022 487,249 495,300 479,648 506,192 572,400
Renault-Nissan Group Total 646,308 531,022 487,249 501,484 488,703 531,981 641,525
Toyota Group Toyota 167,861 194,483 170,855 163,237 154,916 142,798 153,653
Other Sovam 0 19 19 19 19 19 19
Source: LMC Automotive, Global Automotive Production Forecast, February 2014
(Notes) 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
3. For more detailed information or inquiries of forecast data, please contact LMC Automotive.

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