A new report released by the Boston Consulting Group (BCG) pointed out that the auto industry has re-emerged at an alarming rate after the financial crisis, surpassing many other industries.
BCG said in the report "2014 Automotive Industry Value Creation Report: A Resurgence of Automakers" that the global average annual return of automakers and auto parts manufacturers is significantly higher than 26%. The median annual average return rate for each industry.
According to the report, from 2009 to 2013, the median annual total shareholder return of automakers and auto parts manufacturers reached 29% and 33%, respectively, exceeding the average annual return of 26 industries tracked by BCG. Value level (21%). The recent performance of the automotive industry proves that it has emerged from the low point of the 2008 global financial crisis.
After the outbreak of the financial crisis in 2008, the total loss of the three major US automakers was as high as nearly $75 billion, and unit sales fell sharply on a global scale.
One of the report's authors, BBC Senior Partner Shaville Moscow said: "The recent development trend of the automotive industry is gratifying, but for auto companies, maintaining such outstanding performance will be a big challenge. To be more To meet the needs of consumers well, OEMs and auto parts manufacturers must regard innovation as a top priority."
According to the report, the growing wealth of developing markets is an important driving force for companies to stay ahead in value creation. The average annual total shareholder return for automakers focused on emerging markets is between 36% and 49%, while the average median return for automakers focused on developed markets around the world is lower. Between the range of -35%.
This trend is also reflected in the value creation list of OEMs. According to one of the authors of the report, BCG partner and head of the automotive special business in Greater China, He Make said: “In the three-year list, companies from developed markets dominated; in the five-year and ten years. On the list, automobile manufacturers from emerging markets took the lead. Among them, three Chinese passenger car manufacturers ranked the top three in the top ten list of value creation from 2009 to 2013."
Which countries or regions are considered as key markets will have an impact on the way OEMs create value, which is one of the most important findings of this report. OEMs focused on emerging markets create value primarily by combining profit margins with increased sales, while car manufacturers focused on globally developed markets create value by increasing profitability (rather than increasing sales). And returning cash to shareholders through dividends and stock repurchases.
The findings of this report also highlight the importance of developing a global business scale. From 2004 to 2013, the sales volume of the top five automakers with the highest sales increased by 47%. This is not an accident. Developing a global business scale will not only help automakers remain competitive in terms of cost, but will also create conditions for automakers to capture market share and consolidate their competitive advantage in high-growth markets.
The report also mentions that simply developing a global business scale is not enough to sustain performance growth – it is even more difficult to maintain good performance if companies trade for growth at the expense of profitability. OEMs and auto parts manufacturers should increase profit margins.
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