Automotive

PwC Automot ive Valuation Quarterly Update Q4 2015wwwpwccom wwwpwccom/auto As of December 31, 2015 USD in millions, unless otherwise noted PwC Automotive Valuation Quarterly Update (Q4 2015) Highlights S&P 500 Automobiles & Components Index ("Autos Index") Key performance metrics for the largest global companies Chan ge in market ca pitalization Manufacturers Su ppliers Autos Index S&P 500 QuarteroverQuarter (QoQ) 1425% 1167% 499% 645% YearoverYear (YoY) 297% 445% 737% 073% Select multi ples Manufacturers Su ppliers Manufacturers Su ppliers December 31, 2015 120x 174x 75x 74x September 30, 2015 114x 151x 77x 64x December 31, 2014 138x 182x 77x 69x Source: S&P Capital IQ, PwC Analysis Source: S&P Capital IQ, PwC Analysis Americas: Europe / Middle East / Africa: Asia / Pacific: Notable IPOs in Q4 2015 include: This content is for general information purposes only and should not be used as a substitute for consultation with professional advisors1 of 8 © 2016 PricewaterhouseCoopers LLP All rights reserved PwC refers to the United States member firm, and may sometimes refer to the PwC network Each member firm is a separate legal entity Please see wwwpwccom/structure for further details EV / EBITDA Price / Earnings Russian new car sales fell 39 percent in October PwC estimates the Russian car market may take six to seven years to rebound to 2012 sales levels The Russian economy has been slumping due to a major decline in commodity prices and US sanctions (Source: Europe Autonews) Detroit's big three automakers are accelerating plans to produce more small cars for the North American market in Mexico in efforts to reduce labor costs Recent US labor agreements provide a pay raise to veteran workers and an eight year path to $30 an hour for new hires Mexican labor rates are approximately onefifth of US labor rates The automakers still plan to employ US workers to build larger, more profitable vehicles (Source: Reuters) Driven by a rapid decline in the price of gasoline, the average fuel economy for the newcar fleet has dropped to 25 mpg in November, signaling a decrease in demand for fuel efficient vehicles Further, the number of miles driven by the average motorist has climbed above 2007 levels, illustrating how cheap gas prices lead to more miles driven (Source: New York Times) While the Chinese economy continues on its downswing, potential for the auto industry remains A moderate compounded annual growth rate of over 4 percent is expected to continue into 2021 for the Chinese auto industry (Source: PwC Autofacts) On October 8, 2015, Schaeffler was taken public and yielded $1,0577 million in gross proceeds Schaeffler AG offered 66,000,000 shares and the selling shareholder, Schaeffler Verwaltungs GmbH, offered 9,000,000 shares and reserves the right to sell up to 24,400,000 million additional shares in the offering At the Tokyo Motor Show in October, Honda, Nissan, and Toyota announced plans to sell selfdriving cars by 2020 The effort to create selfdriving cars has been bolstered by Japanese government investment into the new technology Leaders see the arrival date as a way to showcase the technology at the 2020 Tokyo Summer Olympics (Source: Automotive News) On October 20, 2015, Ferrari was taken public and yielded $8931 million in gross proceeds The selling company was Fiat Chrysler Automobiles, who granted the underwriters the option to purchase up to an additional 1,717,150 common shares for a period of 30 days after the date of the prospectus to cover over allotments 2015 was a record year for the US market as light vehicle sales surpassed the previous top mark of 1735 million set in 2000 While annual sales finished at a record level, monthly sales slowed in December as SAAR slipped below 18 million (Source: PwC Autofacts) Volkswagen plans to limit the time staff can remain in certain roles in order to improve oversight The implementation of