BBA results for 2020: strong performance in Chinese market: elephants turn around to anchor electrification

With the release of Audi's annual results in BBA, the top three German luxury cars have all made their debut in 2020. It is worth noting that both Daimler, which was the first to release results, and BMW and Audi, which held their annual results in March, not only handed in their transcripts to outperform the market in 2020, but also brought a clearer timetable for elephants to turn around in the electrified era.

Mercedes-Benz is the most profitable in 2020.

Audi's annual sales in 2020 are close to 50 billion euros, excluding special items, and its operating and sales profit is 2.7 billion euros, according to figures released by Audi at its 2020 annual earnings meeting on March 18. In another major financial data, Audi's net cash flow remained high at 4.6 billion euros.

"Last year, our operating sales profit margin reached 5.5%." According to du Siman, chairman of Audi's management board, the global pandemic of the novel coronavirus epidemic has had an important impact on Audi's business throughout the year. Global car demand fell sharply at first, and the market gradually regained stability late last year. "the recovery came first in China, then in Europe and the United States. In the fourth quarter, we achieved record sales, the best quarter in Audi's history. "

The data show this. The Audi brand delivered 1.693 million vehicles in 2020, down 8.3 per cent from a year earlier, but delivered 506000 vehicles in the fourth quarter, accounting for about 1x3 of Audi's annual sales and 3.5 per cent year-on-year growth.

Unlike Audi's strong rebound in the fourth quarter, BMW, which reported results for 2020 the week before, reported a slight decline in revenue in the fourth quarter, but profits before interest and tax rose year-on-year thanks to a sharp rebound in profitability in the automotive sector. This reflects that the optimized product portfolio of BMW Group in recent years is promoting the development of the enterprise. Among them, large luxury car product array, such as 7 series, 8 series, X7, etc., play a positive role in increasing profits.

BMW Group's total automobile business revenue in 2020 was 80.853 billion euros, profit before interest and tax was 2.162 billion euros, and profit margin before interest and tax was 2.7 per cent, reaching the original forecast target of 0-3 per cent profit margin before interest and tax.

Daimler's Mercedes-Benz brand, which was the first to disclose results in fiscal 2020, has become the most profitable company in BBA. Thanks to a series of measures such as reducing costs and efficiency, Daimler's financial results released on February 18th showed that in 2020, the turnover of the Mercedes-Benz passenger car and light commercial vehicle sector was 98.6 billion euros, profit before interest and tax reached 5.172 billion euros, and sales profit margin was 5.2%.

"2020 will be a stress test for all industries, and our financial performance has far exceeded market expectations, reflecting the important progress made in reducing costs and increasing efficiency." Kang Linsong, chairman of the board of Daimler and Mercedes-Benz, said.

Although the performance is different, but the Chinese market for BBA is still absolutely can not be ignored. Take BMW as an example, although global sales fell 8.4 per cent last year compared with the same period last year, China still achieved a breakthrough in the largest sales market, with the delivery of 777400 BMW and MINI vehicles for the whole year, an increase of 7.4 per cent over the same period last year, accounting for 33.4 per cent of BMW's total annual sales and 4.8 per cent year-on-year growth. It was the breakthroughs in the Chinese market that offset the decline brought about by BMW in Europe and the United States.

Speed up the electrified competition

After handing over the unusual 2020 results, BBA has set its sights on the ongoing electrification transformation. To demonstrate its determination, BMW Group made its global debut of the BMW i4 at its annual meeting on March 17, a full three months ahead of schedule.

"the pure electric models BMW iX and BMW i4 launched this year mark the gradual development of our scientific and technological innovation system, setting a new benchmark for all future pure electric models." Chipze, chairman of BMW Group, unveiled a "three-step" plan for the transformation of BMW Group to digital intelligent travel. Of these, BMW will achieve the world's largest OTA upgrade by the end of 2021, offering at least one all-electric model in about 90 per cent of the market segment by 2023; by 2025, BMW's all-electric model sales will grow by more than 50 per cent a year compared with the same period last year; by 2030, pure electric models will account for at least 50 per cent of global sales, when MINI will become a pure electric brand.

Unlike BMW's relatively smooth electrification strategy, Audi's action is slightly more radical. In an interview after the March 18 earnings release, Dussman said Audi planned to stop new fuel engine development projects by 2023, but would try to make existing fuel engines comply with the new emission regulations. To replace traditional fuel vehicle power, at least four pure electric vehicles, including the Q4 e-tron and Q4 e-tron Sportback, will be launched this year, and more than 20 pure electric products will be available by 2025. At that time, about 1/3 of Audi's cars delivered to customers worldwide will be pure electric or hybrid models.

To support this goal, about half of Audi's investment plans totaling 35 billion euros over the next five years will be invested in future technology, of which about 15 billion euros will be invested in electrification and hybrid. At the same time, the synergy between Audi and Volkswagen Group will also contribute to the realization of this goal. Dussman revealed that the first model of the Audi Artemis project for Standard Tesla Model S will be available at the end of 2024 and will be equipped with a standard cell released by Volkswagen at Power Day on March 15.

Although the electric transformation was not further elaborated at the annual meeting on February 18, the new "electric first" strategy released by Mercedes-Benz in October last year shows that from 2025, Mercedes-Benz will launch more electric models based on its second new exclusive electric platform, the MMA modular platform designed for compact and medium-sized cars. By 2030, while electric models account for more than half of new car sales, investment in internal combustion engine models will decline rapidly, when the number of internal combustion engine models will be reduced by 70%.

To this end, Daimler said at its 2020 earnings conference that it would spend about 10 billion euros in the future to expand its fleet of electric vehicles, while spending more than 1 billion euros to expand battery production and buy more than 20 billion euros of batteries. to systematically promote the group into an electric-driven future.

Mercedes-Benz plans to achieve considerable marginal revenue on the new model architecture platform from 2025. " Daimler said.