Wednesday, August 5, 2015

Automotive: German line up sees growing China threat – The World

Le Monde | • Updated | By

The first clouds on the horizon for automakers German top range. For now, they are not very thick, but they start to spoil the landscape. In particular, that of the king of “premium” German BMW. The Munich group published Tuesday, August 4, its financial results for the first half which show a sales increase of 17.6% to 45 billion euros, with operating income up 40% to almost 5 billion. But the net profit to 3.265 billion lavish always has for its part increased by only 1.2%. And this is where the problem lies.

The world’s number one “premium” sees its automotive division to suffer. It’s not very spectacular. The turnover of the industry is still strong up 15%, to 40 billion euros, thanks to the weak euro, which mechanically inflated profits made in the United States or China, both markets the largest group with Europe.

But the operational profits in this division begin to loosen. In the first half, they were down 3.6% compared to the same period in 2014, forever reaching a respectable 3.6 billion euros. But in the second quarter, the slide is more significant since it reaches 15.8%. And operating margin appears to 8%, against 10.5% a year earlier.



“Less than very large sedans or SUVs”

BMW actually begins to feel the effects of the slowdown of the Chinese market and the Battle conducted for several years by the authorities against corruption and flashy cars. “They sell fewer very large sedans or SUV [urban 4x4] , the most profitable, but we see a little, as in Europe, in a range down to less spectacular vehicles “, that agreed to indicate the group

Read also:. Automotive: the” cash machine “China gives signs of weakness

BMW said the situation in China could have implications on the annual results. “The second half of the year will be more strongly affected by investment, development costs and staff costs. In case of increased challenges in the Chinese market, we can not exclude effects on our forecasts, “, said on Tuesday the group finance director in a telephone press conference.

BMW, number two of “premium” in the Middle Kingdom, is nevertheless not the most exposed in that market. Audi, who presented July 30 of also very strong financial results (EUR 30 billion in revenue, up 11.6%) is much more troubled. Whoever sells nearly a third of its global vehicles in China for the first time revised downward its annual goals on the first market in the world. The group does not market the 600,000 vehicles it hoped earlier this year.

Rupert Stadler, CEO of the manufacturer of Ingolstadt, does not deny the difficulties in China. He also dismissed Dietmar Voggenreiter, the local boss for six years. For the moment, the recovery of the European market preserves the results of the subsidiary of Volkswagen China versus deceleration. Operating income increased 9.1% to € 2.9 billion, representing an operating margin of 9.8%. And the interim consolidated net profit amounted to 2.4 billion euros, against 2.3 billion a year earlier.



Mercedes remade his delay

BMW, which sold in the world still 932,000 units in the first half, and Audi, number two with 902,000 units, many return to their Mercedes-view mirror. With 898,000 vehicles sold in the first half, the Stuttgart group remakes his delay. And financially, it does not know the inconvenience of its competitors.

After repeatedly savings plans, a strategic alliance with Renault-Nissan, a wide renewal of its range, highlighted by a new design very aggressive, the brand with the star has made a profound work that pays off.

The revenue of the Automotive Division rose from 35 to 40 billion euros, and operating income reached 4.1 billion euros, against 2.6 billion a year earlier. For the six months, the operating margin for this division exceeds 10%, the highest level of the German trio of high-end.

Worse, for its German competitors, Mercedes does not yet know the crisis in China. Its sales soared 39% to it on June alone, against unprecedented cuts to its competitors. The reason: Mercedes from much lower after numerous problems with its local distributors. In the first six months of the year, it has passed 158,000 cars, against 274,000 at Audi and BMW 231 000

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