This topic will discuss how different major automotive players are performing when it comes to revenue, net profit, cash flows, car deliveries, etc. Great reference will be given to Volkswagen, which is part of the portfolio.
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Here are my observations regarding this topic;
- Volkswagen’s revenue seems to be growing in-line with that of other major automotive players though 2022 revenue growth was a bit weaker.
- Volkswagen’s operating margin seems steady when compared to that of other players.
- Volkswagen’s automotive net cash flow growth was poor in H1 2023 and 2022 when compared to that of other automotive players.
- Volkswagen car deliveries to customers is growing in-line with other automotive players.
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Maybe it would be helpful to calculate averages to understand if VW is above or below the aggregate numbers of these major players.
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Important overview.
I frankly did not know how much profits of BMW and Mercedes-Benz Group (Daimler) exploded in 2021 and 2022.
Going forward we should make getting overviews like this to a standard procedure at an early stage of the research process. (I will try to map out the whole framework this year)
There are also tools that could make this process very fast and we need to understand which of them offers the most reliable and comprehensive data. Example
I think it is probably worth revisiting BMW and Mercedes-Benz in order to observe how well their relatively new CEOs performed, how well both companies are performing on the electric vehicle front and how sustainable the strongly increased profits are.
It would also be interesting to add Volvo to the list due to their relatively strong (?) performance when it comes to electric cars and we should definitely add BYD.
I also think @Magaly’s idea to add a last row in a table to calculate an average is good.
Overall Volkswagen will be a priority in the next weeks as I am still interested in increasing the position.
I would not rule out investing in one of the competitors as well though depending on our findings.
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BMW and Mercedes-Benz CEOs have an impressive track record. Here is a summary of their achievements;
Achievements of Oliver Zipse, BMW CEO include;
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He turned around the company’s transition to EVs.
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As head of product division(2015 to 2019), he delivered a record product rollout designed to provide profits needed to transition to EVs and self-driving cars.
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As head of production, he championed an efficient manufacturing system that involves producing electric, hybrid and conventional vehicles on the same line to increase flexibility amid uncertain demand.
Achievements of Ola Källenius, Mercedes-Benz CEO include;
- He has been championing cost reduction in the company, resulting in record profits in 2021 and 2022.
- Under his reign as CEO, Mercedes-Benz has started to focus on high-end vehicles such as the Maybach limousines, AMG performance cars and G-Wagon off-roader as it shifts away from the less profitable models such as the compact A-Class.
- As head of performance from 2010 to 2013, Källenius turned around the company, which issued profit warning in 2012 and reported record sales in 2015.
Their strong profits in 2021 and 2022 was due to strong pricing of their high-end vehicles as a result of global shortage of semiconductor materials. BMW profit in 2022 also benefited from consolidation of its Chinese venture, BMW Brilliance Automotive Ltd. (BBA). Mercedes Benz profit also benefited from tight cost control.
- According to Ernst & Young (EY), in Q3 2023, revenues of 16 largest car companies rose by 11% y/y to 504 billion euros, earnings before interest and taxes (EBIT) grew by 35% y/y to 39 billion euros, mainly due to currency effects in Japan while EBIT margin grew to 8.6% from 7.2%.
- Mercedez Benz led with a EBIT margin of 13% while Volkswagen tailed with a EBIT margin of 6.2%.
- Ernst & Young (EY) said things are likely to become more difficult in 2024 due to weakening demand for new cars that were associated with huge development costs.
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