McLaren Automotive posts operational profit Record sales of 1,654 cars in 2015, expected to double in 2016.

• Mclaren Automotive celebrates fifth anniversary with record sales and financial results.
• Third year of profitability.
• Increases in research and development. investment and new shareholding.

• Five years since the first McLaren 12C left the McLaren Production Centre.
• McLaren Automotive posts operational profit 
• Record sales of 1,654 cars in 2015, expected to double in 2016.
• Investment in Research and Development increases to nearly 30% of turnover.
• Employee numbers increase by 16% to manage ongoing development and demand.
• McLaren Automotive welcomes a new investment and shareholder as a sign of future confidence.
• Track22 business plan points to successful future as an independent manufacturer of two-seater sports and supercars.

McLaren Automotive, the British manufacturer of luxury handcrafted sports and supercars, has celebrated the fifth anniversary of the first car rolling off the production line with another record-breaking year. 

Operating profits increased to £23.5M – the company’s third successive year of profitability - from revenues of £450.6M, with revenue projected to increase by 50% over the next two years and double by the end of 2022 – an unprecedented performance in the early years of a car company.  

2015 also marked the fifth successive year of increasing global car sales to 1,654 cars, supported by the launch of no less than five new models.

INDUSTRY-LEADING RESEARCH AND DEVELOPMENT 

2015 was another year of investment for the future of McLaren Automotive with a record amount of £123.9M spent on Research and Development. Similar levels of investment in previous years spawned, in 2015, a total of five new cars and the establishment of the three-tier product family – Sports Series, Super Series and Ultimate Series.

NEW SHAREHOLDER BRINGS EQUITY INVESTMENT TO FUND TECHNOLOGY DEVELOPMENT

The McLaren Automotive annual report also confirms an equity transaction of £49 million.  The new equity represents a total of 6.3% investment in McLaren Automotive from McKal Ltd. The Chairman of McKal Ltd is well-known to McLaren Automotive as an owner of two examples of the McLaren P1^TM as well as a frequent visitor to McLaren track events.

AN UNPRECEDENTED YEAR OF PRODUCT LAUNCHES

With a total of five new cars launched, and the unveiling of the Sports Series, Super Series and Ultimate Series product families, 2015 was an unprecedented year of growth for McLaren Automotive. It was also a transition year with the final McLaren P1^TM produced at the same time as the start of production of the new Sports Series models.

The Geneva Motorshow in March 2015 saw the revival of the famous Long Tail name from McLaren’s illustrious motor racing history with the introduction of the limited-volume McLaren 675LT Coupé in the Super Series. The Coupé was joined in December by a Spider variant. Like the Coupé, the Spider is limited to 500 cars and was sold out in just two weeks.

Following on from the iconic McLaren P1^TM, the Geneva Motorshow in March 2015 also saw the introduction of the track-only McLaren P1^TM GTR. Conceived in direct response to feedback from existing McLaren P1^TMowners, the McLaren P1^TM GTR was designed as the ultimate track car. Almost all of the limited run of McLaren P1^TM GTR cars were built in 2015, with a handful finishing construction in early 2016.

The reveal of the new Sports Series at the New York Autoshow in April 2015 was a pivotal moment in the short history of McLaren Automotive. Charged with more than doubling the company’s global sales volume in the coming years, the McLaren 570S Coupé was launched in New York and was closely followed by the McLaren 540C Coupé at the Shanghai Autoshow in April. The 570GT was added to the Sports Series family at the Geneva Motorshow in March 2016. In 2016, the Sports Series should support the overall company sales growth to a volume of more than 3,000 cars.

GROWTH IN RETAILER NETWORK AND EMPLOYMENT

To cater for the future demand, both the McLaren retailer network and its own employment grew in 2015. The McLaren global retailer network expanded to over 80 retailers covering 30 markets.  Twelve new retailers opened in 2015 covering important territories such as Seoul and Houston. 

Employment at McLaren Automotive also kept pace with sales developments with a total of 1,492 people employed at the end of 2015, an increase of 16% on the 1,283 working at the end of the previous year. The 1,492 headcount increased again substantially to about 1,750 in the early months of 2016 with the introduction of a second shift at the McLaren Production Centre and a further 250 new roles being created in the Production, Quality and Logistics departments. The second shift started in February 2016 with the new roles adding approximately 40 percent to the existing headcount in the Production Centre, and will take production rates from the previous 10 cars per day up to 20 cars per day by mid-2016.

TRACK22 DRIVES TOWARDS A SUCCESSFUL FUTURE

Looking forwards, McLaren Automotive has revealed details of its Track22 Business Plan, taking it through to 2022. With a continued focus on building the world’s finest two-seater sports and super cars, the business plan reiterates a commitment to its industry-leading 20-25 percent of turnover invested in Research and Development for future products and technology.  Over the six-year Business Plan period, this represents an investment of £1B and will lead to the launch of 15 all-new cars or derivatives. Of these cars, at least 50 percent will feature hybrid technology by the end of the Business Plan period and the company is also in the early prototype stages of the development of a fully-electric powertrain to evaluate its possible use in a future generation of an Ultimate Series car.

Chief Executive Officer of McLaren Automotive, Mike Flewitt, said of the financial results: ‘2015 was a critical year in the development of McLaren Automotive. The launch of the Sports Series opens McLaren up to an entirely new audience and will be pivotal in developing our sales volumes from the 2015 levels of 1,600 to nearly triple that number by 2020. For this to be achievable, we need to remain profitable but also continue to invest in our future product portfolio. In 2015, this amounted to £124M, nearly 30% of revenues. This level of commitment to investing in future products is core to our business strategy, as highlighted by the recently-announced Track22 business plan that commits us to investing £1B in research and development, delivering no less than 15 all-new cars or derivatives by 2022.’

		2015	2014	% change
Deliveries to customers	Cars	1,654	1,649	0.06%
Employed	People	1,492	1,283	16%
Sales revenue	Million GBP	450.6	475.5	(5.2%)
Operating profit	Million GBP	23.5	20.7	13.5%
Operating profit as % of sales	%	5.2%	4.4%
Profit before tax	Million GBP	5.4	14.9*	(63.8%)
Profit (loss) after tax	Million GBP	2.8	8.4*	(66%)
Capitalised development costs	Million GBP	123.9	91.9	35%
Capitalised investments as a %age of T/O		27.5%	19.3%

*as presented in the 2014 Statutory Accounts before changes in the UK generally accepted accounting provisions (GAP)

Volkswagen starts to "fix" the issues surrounding the Diesel emissions irregularities, and about time too.

• German Minister of Transport, Alexander Dobrindt, and Chairman of the Board of Management Volkswagen Passenger Cars Brand,
  Dr Herbert Diess, heard more about the practical implementation of the measures
• An important step towards resolving the NOx emissions issue in Europe
• The first model is the Volkswagen Amarok, the Passat will follow shortly afterwards

In December 2015, the Volkswagen Group presented specific technical measures to the German Federal Motor Transport Authority (KBA) for the EA189 engines affected by the NOx issue. As agreed, Volkswagen began implementing the measures at the end of January for engines with a capacity of 2.0 litres. 

Over the next few months, the measures will also be implemented on the engines with 1.2 and 1.6-litre capacities. 

Today, German Minister of Transport, Alexander Dobrindt, and Chairman of the Board of Management Volkswagen Passenger Cars Brand, Dr Herbert Diess, met in Berlin and in the workshop of a Volkswagen dealership found out more about the practical implementation of the software update for the 2.0 TDI engine. 

Volkswagen is starting with the Amarok, with the Passat to follow shortly.

“The start of the recall is taking us a great step forwards”, says Dr Herbert Diess. “Our customers are getting a good technical solution for their car and can also rely on quick implementation of the modification.”

Customer-friendly solutions were an important aspect in developing the technical measures. For efficient implementation the affected vehicle models have been put into several groups. 

Only once the KBA has checked and confirmed the proposed measures are the customers affected being contacted and informed about the recall. In a second letter the vehicle owners will be requested to arrange an appointment with a Volkswagen partner. In terms of time, the implementation of the measure will extend across the whole of 2016.

A software update is planned for the 1.2-litre, 1.6-litre and 2.0-litre EA189 engines. The pure labour time for this will be less than half an hour. For the 1.6-litre engine a flow rectifier will additionally be fitted in the intake duct with expected labour time, inclusive of software update, of just under 45 minutes.

The recall has now begun with the 2.0 TDI engine in the Volkswagen Amarok. The installation of this new engine control software means that the Amarok now meets the limits required to comply with the EU5 emissions standard. 

The aim of Volkswagen was always to ensure that these measures do not result in a change to the fuel economy figures, performance figures or CO₂ or noise emissions of the vehicles affected. In the case of the Amarok, the Federal Motor Transport Authority has confirmed that this objective has been fully achieved.

Following in a few weeks’ time, in addition to the variants of the Passat, will be other models with the affected 2.0 TDI engines as well.Modification of the 1.2-litre engines affected is scheduled for the end of the second quarter. Completing the recall, the measures for vehicles with a 1.6-litre engine will be carried out from the third quarter of 2016.

At the same time the implementation of the technical measures will commence in other European countries in agreement with the responsible authorities and in accordance with the national requirements.

The vehicles continue to be technically safe and roadworthy and can therefore continue to be driven in road traffic without any limitations.

Volkswagen delays end of year results and postpones the AGM until further notice.

• Timing of report clarifying background of diesel emissions issue not affected
• Before special items Volkswagen anticipates the Operating Result for the Group at the level of the prior year

Volkswagen Aktiengesellschaft will set a new date for the publication of the annual accounts for fiscal year 2015 due to remaining open questions and the resulting valuation calculations relating to the diesel emissions issue. 

Consequently, new dates for the Annual Press Conference (previously planned for March 10, 2016) as well as the Annual General Meeting of shareholders, (previously planned for April 21, 2016) will be announced as soon as possible.

In this regard, Volkswagen will achieve the best possible transparent and reliable outcome for its shareholders and stakeholders.

Before special items Volkswagen anticipates the Operating Result for the Group at the level of the prior year within the expected range for fiscal year 2015.

The timing of the report clarifying the background and responsibilities connected to the diesel emission issue is not affected by this decision. Volkswagen is sticking to the timing and plans to publish the findings in the second half of April.

JATO announces that the SUV segment became the biggest sector of all in the last year.

• SUV registrations led the way and outsold the traditional segments
• Small SUVs contributed to the growth, exceeding 1.2 million units
• Subcompacts and Compacts registrations underperformed
• MPVs, large and luxury sedans suffered the biggest losses in 2015

European new car registrations went up by 9.3% in 2015, driven by an SUV boom that contributed to a big part of the total growth. For the first time in the history of European car sales, SUVs led the way, outselling the traditional subcompact and compact segments, posting an increase of 24% at 3.2 million units. 

Their market share grew from 19.8% in 2014 to 22.5% in 2015, leaving the subcompacts in second position with 22.0% share, and the compacts segment third with 20.6%. These vehicles along with the mid-size sedans/SW and sports cars were the only segments to gain market share in 2015. 

THE SUV SEGMENT LED THE WAY

The SUV growth was in part possible thanks to the outstanding results of the small SUVs, which contributed almost 38% of total SUV segment registrations in 2015. Their volume increased by 38% over 2014, exceeding, for the first time, the one million unit mark at 1.2 million. 

Despite their strong growth, they were still behind the compact SUVs, which accounted for 40% of the total at 1.28 million units. Small SUVs growth rate was also outperformed by the 42% increase posted by the mid-size SUVs, which totalled 470,400 units. 

The large SUVs came last with 243,000 units, up by 27% on 2014’s results. SUV registrations grew in all of the 29 countries analysed, with the UK posting the highest volume increase from 501,200 units in 2014 to 630,400 in 2015. Portugal, Spain, Denmark, Croatia and Greece all posted more than 40% growth.

In terms of brands, Nissan led the way with more than 376,000 units and 11.8% market share, but its volume percentage growth underperformed the total segments. 

Once again Renault occupied second position but this time it managed to move faster than its closest competitors in 2014, partly because of the introduction of the new Kadjar that allowed it to post a total increase of 44%. 

As a result, it moved further ahead of Volkswagen whose registrations remained static (+1.4%). In terms of segment share, Fiat and its new 500X posted the highest gain, followed by Citroen and Jeep.

SUBCOMPACTS & COMPACTS

The B and C segments occupied the second and third position respectively, losing one position each. The subcompacts registrations totalled 3.12 million units, up by 5.8% over 2014’s volume. These cars were still the most popular in the Czech Republic, Denmark, France, Greece, Italy, Portugal, Romania, Serbia, Slovakia and Slovenia. 

The Volkswagen brand led this segment with a 10.5% share, closely followed by Renault at 10.4%, and Ford which placed its Fiesta as the best-selling of the segment. The best performers were Skoda (+18%), Mini (+44%), Mazda (+46%) and Mitsubishi (+35%).

Within the compacts, even if the Volkswagen Golf kept its position as the best-selling car in Europe, the overall segment lost market share as its volume only grew by 5.8% compared to 2014. The limited growth was the effect of very low increases coming from Germany, France and the UK, the three largest markets. 

The segment is clearly dominated by the Volkswagen brand, which is quite ahead of Ford and Skoda. Peugeot and Mercedes were the only other brands to post double-digit growth, while Nissan increased its registrations by 153%.

Through December, registrations of MPVs slid 1.8% becoming the top loser of the year. The 3.6% and 4.7% rise in Germany and Spain wasn’t enough to offset the declining sales in the UK (-17%), Italy (-4.6%) and France (-1.7%), the second largest market. 

Most of the fall came from the small MPVs whose volume slipped 11.5% compared to 2014, while the compact MPVs benefited from the arrival of BMW and its new 2-Series Active and Gran Tourer. 

Following the MPVs, the mid-size sedans/SW posted significant growth (+12.8%), outselling the city-cars, with 9.05% market share. The introduction of the new Volkswagen Passat and the good results of the Mercedes C-Class boosted sales.  

“Similar to the shift towards SUVs in the US car market, Europeans are clearly favouring these vehicles. In 2015 this segment drove most of the growth as more consumers moved away from the traditional segments and MPVs, towards SUVs and crossovers. Both economic and social factors such as the lower fuel prices and the growing appeal of SUVs’ benefits had a big influence on this sales boom” said Felipe Munoz, Global Automotive Analyst at JATO Dynamics.