SHAREHOLDER VALUE REPORT

Plastic Omnium, Lithia deliver top shareholder returns

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Retailer Lithia Motors and supplier Plastic Omnium returned the most value to shareholders in their categories last year and over the past three years, according to the Automotive News/PwC Shareholder Value Index.

Daimler AG took the award for best return among global automakers in the one-year period, and Volkswagen AG was tops over three years. The shareholder value leaders in the automaker, supplier and retailer sectors for 2013 were honored at the Automotive News World Congress in Detroit this month.

The six publicly traded new-vehicle retailers and global suppliers outperformed the Standard & Poor's 500 and Dow Jones Industrials indexes in both the one- and three-year measurements. Global automakers fell short compared with the S&P and the Dow in both periods.

Technology and innovation have been key drivers for the top performers in all three automotive categories, said Jeff Zaleski, PwC partner for Automotive Transaction Services. "For automotive executives surveyed in PwC's global innovation survey, a third say improving products is their top innovation priority," Zaleski said. "About the same number plan to generate radical or breakthrough innovations in the near term."

VW, Daimler lead automakers


Over the past three years, Volkswagen's shareholder value rose 107 percent. The 14 publicly owned vehicle manufacturers averaged returns of 39 percent in that period.

Daimler took the one-year award, gaining 68 percent in 2013 while the segment average was 29 percent. PSA Peugeot Citroen returns jumped almost 80 percent during 2013, the best of the group. But to be eligible for the one-year award, a company must have a positive return over three years. PSA's three-year results fell 59 percent.

Suppliers rise


Global parts suppliers posted a robust 53 percent gain over the one-year period as global automotive demand continued to grow. Plastic Omnium was up 184 percent.

Every supplier showed growth except Mando of South Korea's and Futaba of Japan. Both had small losses for the period.

Over three years, the 38-company category was mixed. Although the top five at least doubled returns and the group averaged 64 percent growth, five suppliers had negative returns.

Retailers soar


Returns for Lithia shareholders rose 87 percent in 2013. Over the three-year period, Lithia returns rose 404 percent.

Returns for Lithia have led the group of six public new-vehicle retailers for four years in a row for the one-year period, and three straight years for the three-year period.

But all the dealership groups have had a great run. The group's index more than doubled over the past three years, with all retailers up at least 75 percent. Returns for Asbury and Penske Automotive both almost tripled in the period. Over one year, the retail category averaged a 39 percent gain, and all six posted double-digit increases.

"U.S. automotive retailers outperformed the major U.S. market indices over the three-year period," said Zaleski.

While the auto retailers jointly boosted returns by 123 percent over three years, the Dow Jones Industrial Average gained 43 percent and the S&P 500 index rose 57 percent.

Over one year the retailers also did well, Zaleski said, increasing returns 39 percent compared with a 32 percent gain for the S&P 500 and a 27 percent gain for the Dow.

Retailers led the entire automotive sector over three years, as global automakers averaged a 39 percent return and global suppliers achieved a 64 percent gain. But suppliers were tops in the one-year category with returns up 53 percent, ahead of the retailers' 39 percent and automakers' 29 percent.

You can reach Jesse Snyder at jsnyder@crain.com.


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