Belgian new car registrationsfell by 16% in January following the 67% rise in December. The drop in January was expected following the termination of the subsidies on low emission cars and the lack of clarity related on new tax rules. Moreover, new car orders that were placed during the Brussels car show have not resulted yet in new car registrations due to the time lag between ordering and delivering.
D’Ieteren’s market share reached 21.3% in January 2012 compared to 20.1% in January 2011 and 21.9% in FY11.
Year-on-year changes by brand:
(127,28 EUR, 0,22%) -19.7%
(548 EUR, -1,26%) +17.4%
Skoda -8.3%
Seat -41.8%
(48,08 EUR, -0,86%) -8.3%
Small (low emission) cars benefited from the above mentioned subsidies up to the end of 2011. This probably explains why continued to perform well in January 2012 while and Seat were hit the most. Audi’s product mix is geared towards larger cars.
Our View:
We are forecasting a 15% drop in D’Ieteren Auto sales for 2012. About 2/3 of the fall is due to lower demand for new cars following two peak years and 1/3 of the drop is the result of the deconsolidation of D’Ieteren Lease. We maintain our BUY rating. Belron will face easy comparables in terms of organic sales growth in 2012. The cold weather in Europe should help Belron’s top line in 1Q12. The number of jobs should rise in the US this year on the back of the (29,31 USD, 1,59%) contract and the economic recovery. Ourtarget price (€ 50) reflects a P/E of 12.0 for Belron and a P/E of 10.0 for D’Ieteren Auto in 2013.