The first half of 2019 has been unusually turbulent for the world’s car makers, and coming off the back of a solid 2018, the reverse into financial losses for some firms has been a surprise. Weak sales in China can be blamed for some of the trouble, but concerns over global trade wars, Brexit, Dieselgate and anti-trust legal action in Germany are also factors. Of the eight firms we looked at, five – BMW, Fiat Chrysler Automobiles, Ford, Nissan and PSA – made a profit in the second quarter or half year. But six of the eight recorded reduced profits, in some cases by a dramatic margin, such as Ford, Mercedes and Nissan. It is worth noting that the April to June trading period for Japanese companies is called Q1, because their financial year ends in March, making their Q1 the equivalent of Q2 in the US and Europe. Aston Martin’s woes are outlined here, but here’s our rundown of a selection of winners and losers. BMW Profit £1.86bn (-28.4%) | Revenue £23.4bn (+2.9%) | Sales 647,504 (+1.5%) (Second quarter figures) Provisions for Dieselgate-related ‘anti-trust’ legal costs put a significant drag on profits at BMW, despite production hitting a record. The company also highlighted increased competition, launch costs for new models and higher RD expenditure on electrification and autonomous driving. BMW still produced a significant profit in the quarter, but it “dropped sharply” in the company’s own words, and its margin reduced to 6.5% – lower than volume car maker PSA. BMW delivered 566k units (up 2.7%), Mini 89k (down 5.8%) and Rolls-Royce 1328 (up 36%). Although most car makers struggled in China, BMW Group sales increased 24% there. Europe remains difficult, though, with sales down 4%. PSA Profit £3.01bn (+10.6%) | Revenue £34.9bn (-0.7%) | Sales 1.903m (-12.8%) (First-half figures) PSA is a bright light for the industry, having increased first-half profit, boosted by new model launches and a contribution from Opel-Vauxhall, and despite a drop in global sales volume. PSA’s operating margin is now 8.7% – impressive for a volume car maker. PSA says cost saving from platform-sharing with Opel-Vauxhall boosted profitability, offsetting £275m of extra costs in China. The group’s best-seller remained the Peugeot 208. Jaguar Land Rover Loss £395m (+49%) | Revenue £5.07bn (-2.8%) Sales | 128,615 (-11.6%) (Second quarter figures) JLR returned to loss-making trading in the second quarter, having made a welcome profit in the first quarter. The loss was blamed on a global sales slump. UK sales were actually up, and sales in China recovered in June, an encouraging indicator for the rest of the year. Plant shutdowns and delays in WLTP certification were also blamed. Looking ahead, JLR says a £2.5bn cost-saving programme is on track and delivered £400m of benefits in the quarter. Fiat Chrysler Automobiles Profit £722m (+14%) | Revenue £24.3bn (-3%) | Sales 1.157m (-11%) (Second quarter figures) FCA is having one of its better years, with its profit increasing solidly. Strong US performances by Ram and Jeep are the highlights, with the highly profitable Ram 1500 and Super Duty boosting its pick-up market share to 28%, up 7% on last year. Meanwhile, demand is strong for the newly launched Jeep Gladiator pick-up, which is already hitting its forecast full-production run rate. On the downside, Alfa Romeo, Fiat and Maserati are all struggling and sales in China are weak. In response, Maserati is planning a “significant inventory reduction” in the second half of 2019 in readiness for new models in 2020. Always look on the bright side: watch out for bargains in Maserati dealers this autumn. Nissan Profit £12m (-98%) | Revenue £17.9bn (-12.7%) | Sales 1.23m (-6.0%) (First quarter figures) Nissan just about scraped a profit in its first quarter, blaming the near-wipe-out of its profits compared with Q1 2018 on fewer sales, higher raw material costs, exchange rate fluctuations and investment costs to meet new emissions rules. Europe dragged down the sales figures, with a 16.3% drop to 135k units, as did Japan (-2.6%) and the rest of the world (-13%), although sales in China were up (by 2.3%). In response, Nissan is cutting around 12k jobs globally, pruning some compact cars from its model range and reducing annual production capacity to 6.6m by 2022, a cut of 600k. Mercedes-Benz Cars Loss £612m (-135%) | Revenue £20.3bn (-1%) | Sales 575,639 (-3%) (Second quarter figures) Mercedes parent Daimler – the car, truck and van business – has issued four profit warnings in 2019, largely because it is setting aside £1.5bn to cover a fine expected to be levied after Mercedes transgressed diesel emission regulations. A further £0.9bn has been allocated for a Takata airbag recall in the US. Sales, meanwhile, have been hit by the global trade war between the US and China and the diesel backlash in Europe. Most affected were SUV sales, which dropped to 181k units (-13%), although the
Origin: The motoring industry’s winners and losers: 2019 edition
motoring
We got it wrong: the Autocar team’s misjudged motoring gems
Even Autocar’s motoring writers are sometimes guilty of a bit of misplaced scepticism when it comes to new cars. From the Range Rover Velar to the Porsche 911, here are the motors Autocar team members have massively misjudged. Range Rover Velar A three-and-a-half-star road test verdict wasn’t a promising fanfare for Land Rover’s most overtly metropolitan model, subconsciously compounding reservations about a style-centric Range Rover sprung from Jaguar underpinnings. But at least half a star had been shed by the test car’s underwhelming 237bhp diesel engine – a failing remedied by the 296bhp petrol four-pot powering the Velar I spent a fortnight with last summer. It was quick, it handled and it was comfortable. Moreover, it did things off road I would never have anticipated – certainly more than almost anyone would need. It’s currently the Land Rover that would fit my life better than any other. Richard Webber Porsche Cayenne I was a Cayenne sceptic. I couldn’t work out why Porsche had bothered, which explains why I am not a product planner or in marketing. I thought it was a bit pointless and not very pretty. Then I bought an old one. After the passing of quite a few years – 17, I think – I have to say it really is quite handsome. A high-rised 996-generation 911 is not a bad thing. That V8 makes a wonderful noise, it is pin sharp on the road and there is a ton of space in that great big boot. A practical Porsche. Brilliant. James Ruppert BMW Z3 M It’s not so much that I got it wrong at the time, more a case of realising now that although it was flawed, it was almost the last of a breed. Or, to put it more simply, if it was made new today, we’d all love it. I’m talking about BMW’s Z3 M Roadster. A simple car with hardly any electronics, and a lovely straight-six engine with more than enough performance. It looked way better than the standard car thanks to blown-out wheel arches and wide rims. The chassis wasn’t brilliant and the steering a bit soggy. If you own one today, I’d suspect you love it. Colin Goodwin Porsche 911 When I was new to this game, I struggled with the appeal of a car that, conceptually, was deeply flawed. We don’t think about the 911’s seriously unhelpful weight distribution much now, because Porsche long ago defeated the urge of its rear-hung powerpack to initiate unwanted gyrations. Back in the mid-1980s, said flat six could quite easily tip the 911 into a spin if you were rashly indelicate with throttle, wheel and a bend. And if you braked hard while travelling downhill on a wet road, a lock-up might follow. It was an intimidating car. I didn’t realise you had to master the 911, this the key to its appeal. I do now. Richard Bremner BMW Z8 The most obvious car I got wrong was the BMW Z8. When it came out 20 years ago, I noted its 5.0-litre V8 motor, 400bhp output and the fact the engine came from the M5 and concluded this must be a thoroughbred sports car. So when I discovered it was actually quite a soft and comfortable grand tourer, I sharpened my pen and wrote about what a missed opportunity it represented. In fact, the only miss was me missing its point. I drove one a couple of years back and loved its languid gait, dead cool interior and effortless performance. No wonder prices are now nudging £200,000. Andrew Frankel Audi A2 Smart Roadster Brabus ‘Wrong’ is a harsh word in this context. I was honest about the Audi A2, and later about the Smart Roadster Brabus, because they were both fundamentally flawed cars. The A2 had poor visibility, the Smart a poor gearbox, and neither particularly clever ride comfort. Both, though, are cars I could quite happily own today – they’d make a great two-car garage – because their pursuit of an ideal has outlived and outshone their drawbacks. So, in a sense, mea culpa. I’ll tell you what, though: I remain spot on about the one-star-at-best BMW C1 Scooter. Matt Prior Jaguar I-Pace Last summer, I was given the keys to a late prototype Jaguar I-Pace and decided to drive it to the British Grand Prix on qualifying day. Given the potential for traffic snarls, it was possibly brave, but the return journey was only 170 miles and its real range beyond 200. The first worry came when the car started emitting a loud buzzing sound at around 4am. Not looking my best, I ran outside and unplugged it from the charger, reasoning it should have been full by then. Alas, fully clothed and behind the wheel at 6am, I discovered it was saying it would hold only 190 miles of charge. As a result, I drove at a constant 55mph and got home with little to spare. How could this possibly be the future? Then something amazing happened. The same week, Jag’s folks held their hands up and asked to do a software update to put the car in final production spec. I held out no hope that plugging a laptop in could elicit more range… and then spent close to 250 miles driving non-stop. The Achilles heel was no more and the I-Pace was
Origin: We got it wrong: the Autocar team’s misjudged motoring gems
Autocar Awards 2019: Daimler CEO Dieter Zetsche wins Issigonis Award for extraordinary achievements in motoring
It’s likely no boss at Daimler will wear a tie to a middle-ranking business meeting again. In 2015 the company’s long-serving, high-achieving CEO Dr Dieter Zetsche – winner of this year’s Issigonis Trophy, Autocar’s highest accolade – gave up neckware for meetings. His acolytes gratefully followed suit. Even after four years people still remark on this apocalyptic change at least as much as they do about the Mercedes CEO’s far more significant corporate achievements – such as demerging the company from a disastrous Chrysler alliance, changing company culture, surviving the worst of Dieselgate despite a huge recall of Mercedes models, beating BMW in 2016, vigorously embracing the new electrification age and leaving the company in a well-founded and profitable condition, stuffed with ideas to face the future. utocar Awards 2019: The
Origin: Autocar Awards 2019: Daimler CEO Dieter Zetsche wins Issigonis Award for extraordinary achievements in motoring
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