Q1 2016

www.pwc.com/auto
As of March 31, 2016
USD in millions, unless otherwise noted
PwC Automotive Valuation Quarterly Update (Q1 2016)
Highlights
S&P 500 Automobiles & Components Index ("Autos Index")
150
145
140
135
130
125
Key performance metrics for the largest global companies
Change in market capitalization Manufacturers Suppliers Autos Index S&P 500
Quarter-over-Quarter (QoQ) -6.5% -3.1% -4.5% 0.8%
Year-over-Year (YoY) -15.9% -6.7% -15.5% -0.4%
Price / Earnings
EV / EBITDA
Select multiples Manufacturers Suppliers Manufacturers Suppliers
March 31, 2016 9.4x 14.3x 7.0x 6.7x
December 31, 2015 11.9x 17.4x 7.1x 7.3x
March 31, 2015 14.2x 19.3x 9.5x 7.1x
Source: S&P Capital IQ, PwC Analysis
Source: S&P Capital IQ, PwC Analysis
Americas:
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Europe / Middle East / Africa:
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120
115
3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016
General Motors Co., Ford Motor Co., Toyota Motor Corp. and fourteen other automakers have reached an agreement with the U.S. Transportation Department to improve safety, which includes cyber-attacks on their increasingly wired vehicles.
(Source: Bloomberg)
The Takata airbag inflator recall is one of the largest and most complex recalls in auto industry history and is growing larger. As many as one in ten U.S. vehicles may be affected. The NHTSA demanded that Takata prove by the end of 2019 that its
ammonium nitrate inflator propellant is safe or recall every ammonium nitrate inflator ever made. (Source: Automotive News)
Coming off of an all-time vehicle sales record in 2012, Brazil has been struggling with the deepest recession the country has seen since the 1930s. The main driver for the decline is due to mixture of economic softness, lack of infrastructure
investment and political strife. (Source: PwC Autofacts)
Johnson Controls announced a plan to buy Tyco for $16.5 billion in anticipation of saving hundreds of millions of dollars in taxes in the first three years. Presidential candidate Hillary Clinton was noted calling the plan “outrageous,” and that would
block such inversions by using an “exit tax.” (Source: Reuters)
The head of the manufacturer’ association stated that South Africa’s car sector, the country’s largest manufacturing industry faces a third successive year of declining sales. The automotive industry contributes 7.2 percent of South Africa’s GDP,
accounting for 3.8 trillion rand ($238 billion) in 2014. (Source: Reuters)
LMC Automotive stated that car sales in Western Europe are up during February and annualized selling rates are good. LMC Automotive noted a 5.3% to 13.88m market growth this year in West European car market. (Source: Just Auto)
Asia / Pacific:
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With the Indian automotive sector growing again after two years of decline the government is pushing up deadlines for stricter emission standards. The shortened time horizon has created challenges for the industry. (Source: PwC Autofacts)
Ford plans to exit Japan and Indonesia as they see “no reasonable path to profitability” and maintained little market share. Ford began operations in Japan in 1974 with 1.5 percent of the market share and Indonesia in 2002 with 0.6 percent of the
market share. (Source: Reuters)
Due to a shortage in steel supply, Toyota Motor Corporation may stop Japan car output. A recent explosion at an Aichi Steel plant hurt the production of special steel parts used by Toyota. (Source: Reuters)
Notable Transactions in Q1 2016 include:
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Magna International Inc. entered into an agreement to acquire GETRAG Getriebe- und Zahnradfabrik Hermann Hagenmeyer GmbH & Cie KG on July 16, 2015. As of September 16, 2015 Magna entered into an underwriting agreement providing
for the issuance of $650 million of unsecured notes which will mature on October 1, 2025. Per the terms, Magna International Inc. acquired a 100% stake in GETRAG Getriebe- und Zahnradfabrik Hermann Hagenmeyer GmbH & Cie KG. (Source:
S&P Capital IQ)
Linamar Corp. made an offer to acquire Montupet SA from Financiere De l'Echiquier, Schroder Investment Management Limited and others October 14, 2015. As of February 18, 2016, the tender offer is completed. Linamar Corp. now owns 96.85%
of the share capital and 96.41% of voting rights of Montupet S.A. On February 19, 2016, Autorité des Marchés Financiers (“AMF”), the French Regulatory Authority, cleared the transaction. (Source: S&P Capital IQ)
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