Welcome to CIE Automotive's fourth quarter 2024 results conference. We’ve got Jesús María Herrera, and we will have a Q&A session at the end of the meeting. Please remember that you will only be able to ask written questions through the website tool. Next, I’d like to give the floor to Lorea. Thank you.
Good morning, everybody. Welcome to the fourth quarter conference. As you know, today, as Juan mentioned, we have our CEO with us, Jesús María Herrera. I'm sure you have many questions for him. So we will start with a brief review of the fourth quarter and 2024. Before moving on to the Q&A session, we will start by reviewing briefly the situation in the light vehicle markets in Europe. Production has continued to contract throughout the fourth quarter, registering the largest quarterly decline of the year at -10%. Beyond the uncertainties looming over the European market, two specific factors have impacted these volumes. On the one hand, the strike at Volkswagen in Germany during December 2024, which ended with an agreement with the unions, and also the withdrawal of incentives for electric vehicle purchases in important markets such as Germany throughout 2024.
Overall, 2024 has recorded a declining production of 6%. The total has been 15.7 million vehicles produced, 18% below pre-COVID levels. The delay in the purchase decisions due to uncertainty about what vehicle to buy, the withdrawal of incentives to electric vehicles, and increasing demand for imported Chinese cars, which should drain European production, are probably some of the main factors behind this negative evolution of the European markets. The main consequence of this scenario is the overcapacity across all lanes of the supply chain. Idle capacity is estimated around 35%, which is equivalent to an idle capacity of over 8 million vehicles. In this context, we have continued to see throughout this fourth quarter some restructuring announcements both from OEMs and suppliers.
Decisions that we expect will contribute to the health improvement of the European automotive sector in the medium and long term, but only in 2024, they have already meant the loss of almost 60,000 jobs. Let's go now to North America, and it has suffered a production loss of 4% in the quarter, influenced by the inventory reduction strategy of the Big Three in the United States are comparing inventory levels in December 2024 compared to those in September 2024. For us to take a look at the evolution, Stellantis reduced its inventories by 30% in the quarter, from 90 to 63 days. General Motors reduced their stock by over 20%, from 68 to 53 days. Ford reduced them by over 10%, from 90 to 80 days.
As a whole, the stock, the inventories of U.S. industry were around 46 days in December 2024, which was a drop of over 15% compared to those 56 days we had in September, although we have seen some, well, a bit of a rebound at the start of 2025. While the positive note in the North American market was once again Mexico's productions, as grew again in the fourth quarter by almost 3%. Overall, throughout the year, we see a North American market has contracted by nearly 2%, with a total production of 15.4 million vehicles, and Mexico grew by 5%. The U.S. contracted by 2%, and Canada keeps on losing volumes quarter after quarter, and it is now less than 10% of North American production.
If we talk about China, the fourth quarter with 9.5 million vehicles produced, the highest quarter in China, also the strongest quarter with a growth of 8%. Behind these very positive figures, we have major headlines in the Chinese market. First, domestic demand driven by government incentives. It is important to mention that the fear that scrap metal incentives, which were ending in 2024, were not going to be renewed, caused many consumers to advance their vehicle purchase to the fourth quarter of 2024. However, well, at the end, the renewal of the incentive scheme has already been announced in January for one more year. The second headline in the Chinese market, consumer discounts hit their ceiling in the final weeks of the year to be able to meet the annual sales targets of manufacturers in the context of an intensifying price war.
For example, in the Chinese market, 227 car models received price cuts in 2024, much more than the 148 models that saw these price cuts in 2023, and significantly more than the 95 models whose prices were reduced in 2022. With this price war, I mean, this price war favors Chinese manufacturers whose market share kept on growing up to 66% of production in 2024, which means that that's a market share increase of 7 percentage points compared to 2023. Third, and also linked to Chinese manufacturers, the increased penetration of electric vehicles in that market, with an increase of no less than 11 points in 2024, reaching, while new energy vehicles reached 47% of production in 2024 compared to 36% last year.
Last, the success of Chinese exports. China is now consolidating its position as the world's leading vehicle exporter, exports that grew by 20% in 2024, reaching 6 million vehicles exported, further widening the gap with the second largest exporter, which was Japan, with over 3.8 million vehicles. The result of all the previous comments is a Chinese market that grew by nearly 4% over 2024, and it has now surpassed for the first time in history 30 million vehicles produced. Brazil, well, the Brazilian market grew in the fourth quarter by 17% in a quarter in which OEMs pushed especially hard to restore inventories to normal levels. This normalization was possible thanks to a solid demand that can be seen in data such as the sales of vehicles in October that reached unseen figures since December 2014.
The demand for vehicles has been impacted by a reduction in unemployment, lower interest rates during 2024, despite the after and the end of the year in 2025, and the renewal of fleets. Overall, we can see a significant growth in production of 8%, and it turns Brazil into the market which has grown the most in 2024, and it's now back in the eighth position among the top vehicle production producing countries. I must highlight that besides the growth and 2.4 million vehicles being produced, it's still only 15% below pre-COVID levels, which means that it has significant potential for growth. Now we get to India. The Indian market has grown by 3% in the fourth quarter, driven among other factors by a strong festive season, the launch of new models, and an attractive discount policy at year-end by many manufacturers.
The macroeconomic environment is also contributing to this growth with political stability and increased available income, and for the full year, vehicle production has grown by over 4%, reaching almost 6 million units. It's closer to 6 million than 5 million now, consolidating its position as the fourth largest passenger vehicle producer globally. As you know, when we talk about India, it is important to mention as well the evolution of the other segments that we are exposed to. The motorcycle segment grew by 8% in the fourth quarter, driven by strong prospects in rural India. The year has been even more positive with a growth of 16%. The tractor segment that benefited from the good monsoon and strong harvest has also grown by 12% in the quarter, recovering part of what it had lost in previous quarters.
And last, the heavy vehicle segment that suffered in 2024 due to delays in public works and a negative evolution of some of its key industries such as coal and cement, and it's been reduced by 12% in the whole year. Let's now talk about the results, our CIE results, excellent results, and they're even more surprising in a challenging context like the present one, and with some peers reporting results that are significantly lower. The fourth quarter with sales of EUR 915 million, with an EBITDA margin of almost 18%, slightly impacted by the usual end-of-year context like provisions and maintenance stoppages by customers or own stoppages and so on. But above all, with a net result of EUR 67 million, which is over 7%, which means that over 7% of sales have become profit.
The fourth quarter and consolidated results of 2024, in which sales reached almost EUR 4 billion, although they were penalized by forex effects, growing by 1.1% at constant exchange rates and outperforming the global market by over 2 points. This growth was driven by almost all regions in CIE, especially Brazil and India, two of our key markets, both for the present and for the future. Besides sales, all, well, the whole P&L is evolving positively, an EBITDA of EUR 728 million, which means that there is a margin of 18.4% on sales and an EBIT of EUR 538 million. That's a margin of 13.6%, exceeding by 40 basis points the margins of December 2023, and they consolidate our operational strength. The best that all geographies, all CIE geographies have contributed to this improvement of operational margins.
In all of them, we have seen an improvement of operating margins in 2024 when they are compared to 2023. We should highlight especially good performance in Asia. In India, we exceeded EBITDA margin of 18%, and in China, we have maintained our focus on profitability, and we exceeded 19%. Also, Europe, the most challenging market today. D espite all the hard situation, we've been able to improve our profitability. And in addition to these operational improvements and strict investment control, well, financial and tax policies that allowed us to get to a net profit of EUR 326 million, which was practically higher than the previous year with a comparable scope, adjusting for the profit contributed by the sale of German businesses in 2023. And at a constant exchange rate, it would be even higher.
We can truly see solid positions between the P&L is actually in our ability to generate cash flow with a conversion of EBITDA into operating cash of 67%, with EUR 464 million of operating cash flow generated. In terms of working capital, it's been a very efficient management year that allowed us to stabilize both the operating working capital as well as reducing the factoring we've used without significant peaks in consumption or generation. In terms of investments, maintenance CapEx that was stable in line with previous quarters, ensuring the efficiency and operability of our facilities, and a growth CapEx that prioritized our expansion in emerging markets such as Mexico and India. Regions in which we've been able to see that our CapEx to sales ratio is slightly higher than the global ratio, and our investments will gradually contribute to more sales in the coming years.
Well, shareholder returns, we have distributed more than EUR 120 million in dividends, EUR 180 million to the parent company and EUR 14 million to minority shareholders, especially in India and in one of our Chinese subsidiaries. And it's true that shareholder payments is one of the main priorities of the CIE project, and in 2024, about half of the EUR 250 million of our generated cash flow have been allocated to dividends. And despite all these dividends, we have continued with our deleveraging process and financial debt and EBITDA ratio is at 1.34x, a level that's below our comfort area, our comfort of around 2x . So we have room for future investment in corporate operations. With these results in 2024, we'd like to briefly review, it's in the presentation, our progress towards our 2025 objectives.
In these four years, 2021 to 2024, we have already achieved our objective of growing by 20% percentage points above the market thanks to the strong, very strong organic growth in our regions. The EBITDA margin was 18.4%, which is approximately 90% of our target of 19%, even in a challenging inflationary context. Our CapEx is still solid and aligned with the plan to around EUR 1 billion. The corporate tax payment is still stable at around 2% of sales. And in terms of cash generation, which is probably the most important guidance of all the 2025 objectives because it implicitly includes all the other objectives, in 2024, we have achieved almost 90% of the EUR 500 million target with over EUR 460 million of generated operating cash flow.
Now, after the close of 2024, we have to keep on looking forward and looking at the future into a sector that's still facing an uncertain context, probably, well, especially marked by macroeconomic, geopolitical, and transitional factors in our sector with very different dynamics by region. India will still be leading global growth with probably an advancement of + 6% in 2025, a strong domestic demand driven by the growth of the middle class, also a stable economic environment, while the country consolidates itself as an import-export hub. In terms of other segments beyond passenger vehicles, also very good prospects with a truck segment that is growing over 5%. It's got a compound annual growth rate of over 5% for the next five years. Tractor segment, it's going to have expected growth close to that of trucks and motorcycle segment.
We have even higher growth between 7% and 9% of compound annual growth in the next five years. Brazil is expected to grow by, or strongly by, at around 5%, driven by lower interest rates and improved trade access, the stability of the financial sector, financial market rate, and global manufacturers making new investments in Brazil, reinforcing the local industry. China is expected to grow by 2% in 2025, keeping that stable evolution. And, well, there's a challenging trade environment, but it's a country that's taken measures to boost domestic consumption and uphold the sector's activity. The incentive scheme for scrap metal has been renewed for 2025, expanding the range of vehicles that are eligible for this incentive. And this, with these new promotions offered by OEMs, will surely contribute to this growth in 2025. North America, we will reduce its production by 2%.
Big differences amongst the different parts of the region. The United States will probably fall by 3% due to the economic slowdown and interest rates that are still limiting credit access. Mexico will keep on growing by probably 2%, driven by the growth of the manufacturing sector and the arrival of new investments, production investments. Europe, in Europe, production will probably drop by 5% in a key year in which regulations will set the roadmap for the sector with a new CO2 regulation that's going to have an impact on the production mix and the plans of manufacturers. We could be in an absurd situation in which manufacturers will need to reduce internal combustion engine production to improve their mix and limit the penalties, and at the same time, electric vehicle demand that's still not working without incentives, and in many countries, those incentives have been reduced or even withdrawn.
Mitigating factors in Europe may be good GDP prospects, controlled inflation, interest rates that might be lowered, and some tariffs implemented in 2024 to electric Chinese vehicles that could favor European production. Taking all of it into account, we're facing 2025 by understanding that production will remain stable with differences between different regions, and emerging markets will continue to grow while mature markets are still showing a weakness. What's important out of these production figures for 2025? Well, the hypothesis of the fact that IHS production are uncertain, such as the evolution of tariffs to vehicle inputs. The hypothesis that IHS assumes for the 2025 figures are that Mexico will have no tariffs yet, a universal tariff of 10% to the European Union, the United Kingdom, Japan, and South Korea, starting in spring 2025, and an additional tariff of 10% on China.
It seems this is the scenario we're going to have to face in 2025. It's complex, and it's also worth mentioning that our current strategic plan was defined at the end of 2020, and it was made public in early 2021 in a context that was completely different to today. We were projecting additional 25 million vehicles produced during that period, and inflation and interest rates and global geopolitics were entirely different. Despite all of it, we're here and we keep on advancing every quarter and every year, and that's the message I'd like to finish with. Given the positive evolution of our strategic plan up until December 2024 and our outlook for the next quarters, we'd like to confirm once again that we're going to keep all our commitments for 2024. Now, let's move on to the Q&A session.
We'd like to remind you that Jesús María is here with us. Jesús María Herrera, our CEO. So please, Juan, to go ahead with the questions.
We have many questions. The truth is that probably more than in previous occasions, so please. I am sorry if, well, I'm trying to get everything organized, but it's not easy, so please. I'm sorry if, well, let's start. First question in terms of 2025. Are we expected to grow at a constant exchange rate? And if we could talk about the performance expected by region in 2025.
Well, first of all, good morning, everybody. It's a pleasure to be here again. And I will try to answer all your concerns about our project. And I'll talk about 2025. What will be in reality is that CIE will keep on increasing its market share in all the continents in which we are present. But given that we cannot value what's going to happen in those, we don't know what's going to happen in all those continents, but we know that CIE is a winning player, and as such, it will keep on growing above average, above market share. And that's also guaranteed for 2025, which was basically the question, right?
And they're asking what to expect for our performance in 2025, so how different markets are going to work on the margin.
There are markets such as the European market that are still suffering. Behavior will be better. The American market is also suffering. We are stronger in Mexico, so our performance is a bit better, and then we have two markets, like Brazil and India, that are going to grow strongly, and in those markets, we will increase our market share as well. In terms of margins, well, our objective will be to keep on improving the margin in the different markets to be able to reach our objective, which is to reach 19% EBITDA in the present context in the sector, and of course, the variables were not included in the strategic plan when it started. Inflation, interest rates, growth, 20 million trucks less being produced, but despite that, our figures are positive, and we will still meet all the commitments we have made.
Next question is about EBITDA margin of 16% - 19%. Which are the keys to get there?
I think at CIE, we've never based our margin in an important increase in volume. We always look in inputs to improve our margins. And of course, we are analyzing and improving all our processes to try to get to that 19%. It is true that we have closed 2024 at 18.4%. We only need to make a jump of about half a point. And that jump, well, we believe that we are going to be able to make it, and you'll probably see it in the next quarters.
One question about a different topic, M&A. Are we expecting some transaction in 2025?
I'm sure we'll have some transactions. Of course, we keep on working. I mean, it's key to the growth of CIE. And I would like to elaborate a bit more about it. I believe that Europe, well, we need to understand that there's an excess capacity, and it's also true. Well, we are analyzing things in Europe, but of course, it's very risky. Everything in Europe is risky. Europe's suffering. Competitors are suffering a lot. And taking a very high risk in Europe is not part of our objectives. If our clients ask us, they tell us that they need us, well, of course, we will undertake acquisition projects. Our main focus is now in India and Brazil. Brazil is a closed market, so a market that we master.
There are opportunities, of course, not as big as the ones in India, but opportunities in which we can be able to integrate and improve and generate value. And that's the key objective for a company. In India, we've been assessing companies for a long time, important companies as well. But as it tends to happen in that country, well, things normally take longer than we used to. N egotiating with the Indians normally doesn't take nine months like in other places. It probably takes years. And for some years now, we've been talking to some companies, and I hope these companies will be part of our group, and I hope we will be able to integrate them because India is certainly a growth market where we want to put our bets in.
And in case that the M&A does not happen, what would be the best use of the cash, given we have an all-time low leverage ratio?
Well, the truth is, you know that our focus is always to pay our shareholders. You've seen that we have increased our dividend year after year, and despite that, we have been able to reduce our debt drastically. It's a bit below EUR 1 billion adjusted financial debt, adjusted financial debt. And undoubtedly, the big issue is that we have a big cash generation and a lot of money. So we will keep on and analyze all the different tools, all the possible tools to increase payments to our shareholders. We believe that we should keep on growing with this market consolidation. We have to keep on integrating companies and betting on that growth. Otherwise, we've got a debt reduction that tends to zero because our generation is very important.
So there are a thousand ways to do it. But it is to keep on paying our shareholders, and we could increase our dividend, or we can find any other formula that makes investing in CIE Automotive more appealing.
We are now in a question about CIE India. They're asking about the Indian market. They see a loss of market share with our clients. And while other comparables are increasing their market share, how are we going to tackle this issue?
Well, I think everybody knows CIE Automotive, and we have two objectives: to increase our market share as long as the market share we win is linked to an increase of profitability, increased profitability. T his year, we have increased market share in India. Maybe some competitors have won more market share by reducing their margins, and that's forbidden at CIE. That's just forbidden. Market share is important, but margin growth is even more important, and that's what you can see in India. As Lorea was mentioning, we are very close. We're close to 8%, and we have to keep on increasing our margins. So I mean, it is not as important.
It is important, but we shouldn't increase our market share by reducing prices and by reducing prices, reducing margins. I know there's a price war, but we're not going to enter it. We are only entering when we can guarantee the return of our investment. In a group, that return is 20%.
Now, they're asking about the European business and our Forging business. How are we losing there and how are we planning to tackle these issues in our business?
Quite obviously, Forging is one of the technologies that could, and that is actually suffering a bit more. In other technologies, we are actually growing, but what's important is that we are able, even with a drop in those technologies, to have extremely high profitability margins. We are investing in new forging technologies such as aluminum that should provide us with a recovery of that drop. In all technologies, in this case, in the forge business, we have alternative plans to compensate for that possible drop due to the evolution towards electric vehicles.
In Metalcastello, there are various in terms of clients and products. How could we reinforce its resilience? Because how sustainable is it to export to the United States in this new environment in which we're in?
I believe that somehow we need to understand that, well, the final client of Metalcastello, Metalcastello is, I mean, there are clients who are in a sector, I mean, it's farming machinery and construction machinery. So, I mean, it's always been seasonal and developing cycles. Now we are at the low point within that cycle, but as it always happened, it'll come back. And I'd like to highlight in Metalcastello that despite we are in the lower part of the cycle, our EBITDA is still important at around 20%. And I believe that's something important to highlight right now. But I like to insist, I mean, the cycle will come back, and I hope it'll be back in the midterm. So I'm sure the cycle will be better in 2025, and we'll recover.
And on tariffs, that's going to be the usual question this year. Well, I'm sure you'll share with me that despite what the, well, the president of the United States is an expert in generating news that are able to reach agreements and in practice doesn't really have an important impact. It actually has a very residual impact, and that's what we expect. You've seen all the tariffs they want to have in Mexico and Canada, and they've delayed it once. They've delayed it again, so I'm sure it makes sense. There are agreements that will not change as much. Sometimes when you read the newspapers, it seems things are not going to be normal, but they will, and as I mentioned earlier, I mean, we just got the data, and things aren't changing as much.
The productions, they estimate in different markets, both in Mexico and Europe and so on, for 2025, exactly the same as the ones they had before Trump became the President of the United States, so, well, I believe what we have, we have to, of course, be attentive, but we're not going to suffer that much. We didn't suffer that much with the previous government when Trump was president before. Of course, I mean, CIE is present all around the world, so there could be risk in one region or another, but of course, there will always be opportunities in other markets. What's lost in one area can be won in a different area because CIE is a global project that's present in all the countries and on all the continent where vehicle production is important.
I think it's always in our heads, but when the United States produces 10 million vehicles, but the consumption is 16 million, so the United States has what needs? They need inputs, making it impossible to have produced 6 more million in a country where there's full employment. It's hard for all of us to have qualified workers, and the inflation that could mean it's just not feasible. Jesús María said that these are just headlines, and we'll see what happens. But just for you to understand what the figures look like, 10 million being produced, over 16 million vehicles being sold. They need inputs.
Besides that, there's no installed capacity in that sector. We talk about components in the United States to cater for those volumes. I mean, if we talk about cost, the cost in Mexico is 1/3 of the cost in the United States. American clients will still have incentives in 2008 with pretty heavy losses if they don't resort to the cheapest source, which is Mexico.
Okay. One question about India and an investor is it could be worth much more under the CIE's umbrella. There's a potential growth happening in CIE India. Why is that not being done if it'll be a price increase?
I mean, if he's able to guarantee that price increase, I'll do it. If they're able to guarantee it, I will do it straight away. But you know, and we've mentioned this, these are different businesses. It's got nothing to do. And all our Forge business has nothing to do with the automotive component business. One is a process, based on process, and the other one is a product-based business. That's why we are not blending it. But if that was the case, truly was the case, I know we've had different meetings in India. They were saying that it'll be very interesting, but we'll analyze it. But I think we shouldn't. I mean, we've got a forge business.
I mean, we're present in different countries, in Mexico, China, in the United States, in Europe, and in India. And breaking that business, just one part of it, which would be India, we're not sure that's going to add value.
But I mean, if that business acts independently from the other sector and that we will have just one leg of a stool separated, which would be India, taking into account that CIE's stock price is lower, could we increase our participation up to 75%? That's what's allowed.
Well, it seems this is the result presentation for CIE India. I'm just joking, but I'm not annoyed by the questions coming from India. Of course not. But obviously, the drop has been a drop not just of CIE, but all our comparables. A drop of between 20%-something and 30%-something. So we've dropped 20%-something, some others 30%-something. It's a generalized drop, and we still believe that we're thinking about CIE Automotive, not CIE India, because if we were thinking about buying stocks, we would be thinking about buying CIE Automotive because in our opinion, its price is really, really low. The price of CIE India, well, there's been a drop, but some years ago we were at 180, really, and we're now at 400. So there's been a growth. CIE in Spain, we've been at the same level of around 25, and now even below 25.
So below 25? And I believe people are not really valuing everything we are achieving with this strategic plan. I'd like to remind everybody that this strategic plan was 2021-2025, and CIE is generating over EUR 2.5 billion of operating cash flow. CIE is reducing its debt by over EUR 700 million and going from 3.5 x to around 1x at the end of 2025. This is not being valued, and that's why our idea is that CIE is much, much cheaper than CIE India. Even if CIE India has a behavior that's close to our comparables in India, I think, I mean, they all went up to 600. Now, I mean, all companies have adjusted the price.
That's now changing in Asia. They're basically asking about margins for the next quarter, both of China and India. They've been significantly lower than the previous year, so to see if there's some sort of explanation here.
The truth is they have been lower, yes. But what's important is that those drops are not recurring. Those drops in margin are not recurring. It is true that in China, we have had very, very high margins, and there has been a correction in the fourth quarter. But what's important is for us to keep to have the margins of 2024. Margins have grown in all the geographies in 2024, and they are helping us reach our objective of having an EBITDA of 19%. So we'll probably have better margins than last year. And there's been different events that have happened. They happen in all the geographies, in this case, not just China and India, also in Brazil or in Mexico. And they are the result of many different variables.
In some countries, wages are rising in October. In some of the countries, given the price increase of dollars, there's been an increase of the prices of raw materials. So there are a thousand variables that, well, in any given quarter, we can have a drop in margins, but I'd like to insist on the fact that they are not recurrent given that the result is the minimum recurring result for the next few years.
Let's go now to Europe. Well, Europe in general, without CIE India, i t's a market without growth. Are you thinking about closing plants or any important restructuring plan?
Well, certainly, the European market is suffering important drops. In the first quarter, it was a double-digit drop, and CIE will drop less than the market. Why? Because we are consolidated. Our competitors are suffering importantly. Some of them are closing, and the reduction in capacity helps strong companies like us increase its market share. Closing? Companies will not really think about closing any of them. We need to realize that CIE has not made strong investments in Europe in the past few years. We have focused on growth markets, and we have not added excess capacity in Europe. It is true that some other companies have invested in electric vehicles, and now they have issues in why investments were made for both combustion vehicles and electric vehicles as well.
That's why we haven't gotten excess capacity at CIE. We keep on working every day. We believe that under these circumstances, we'll be able to keep on improving our margins well by doing what we always do, just adjusting ourselves to the demand. Our costs need to be adjusted to that demand so our margins are still high, just like the ones we've got today.
On European regulations, let's see, do we expect any relevant regulation or announcement in March?
I think everybody's quite lost. Everybody's not really sure about what to do, and we see that in Europe as well. I don't know. I think that regulating too much can also be bad. I believe that somehow, well, things, just given their nature, need to evolve in a logical way. My hope and I believe nothing's going to change dramatically.
I'm sorry. I'm sorry. I was about to say, I mean, the rumors. I don't know if that's the right term, but what they're talking about with this strategic dialogue in Europe, they're talking about, you know, that March 5th, we are going to present the action plan that will stem from that action plan, from that strategic dialogue. Now they're talking about three potential changes in European regulations. What would be to increase flexibility of emissions in 2025, creating a multi-annual plan, so not just including 2025, but make it 2025, 2026, 2027. The multi-annual result will result to a fine. It would be sort of giving more time to the sector to decarbonize.
And second, there's one of the main topics here in Europe is the lack of coordination between different countries. So some of them are getting rid of incentives to EVs, and some others have certain ways. Well, they're talking about pan-European incentives, so incentives to European vehicles that are exactly the same in all markets. And I don't know if the word is rumors or the drafts that are on the table. And CIE is, of course, involved in that dialogue through the vendor associations. So we'll see what the action plan looks like. And the question was about changes in regulations. Well, those are basically the two that we can think about.
Also on CapEx, what do you expect this year? CIE said that they're going to get greenfield in Mexico as well. So what do you expect this year in terms of CapEx?
We see a maintenance in investment that was a bit low. So on a CapEx level, 2024 was the most important year in terms of CapEx. You've all seen it. And the results, I mean, it's been due to this new company, I mean, in North Mexico with an investment of $100 million. And that investment, by the end of 2024, it's about $70 million worth. So we're only missing $30 million. So this year, we expect to have a CapEx reduction. Normal CapEx in CIE, it's about 5%. 1.5%-2% of maintenance CapEx, and the rest is growth. So this year, we will go back to 5%, around 5%. Maybe with this $30 million we're missing from the greenfield in Mexico, it could be a bit more than that. But in this plan, our plan was 5% of CapEx, so we're going to meet that.
We have to meet that with that greenfield. That's going to give us, it's going to help us a lot in 2026, even more in 2028. We've got two phases. The growth phases, one's going to be in 2026, and the other one's going to be in 2028. And we will see that in the next plan. They're also asking about tariffs if it might not be the right timing for this greenfield project in Mexico. I'm thinking about starting a second one in Mexico, in fact, because it truly is the best place in terms of logistic costs to export to the United States. No, Mexico, it's basically the United States. Our clients have supported us. I mean, our clients have supported us strongly, and our clients trust it's going to be a success.
I'm half joking, but before we start, they're already asking about another one with other technologies. That's where we need to be. It's very, very competitive for the United States. There's a lot of volatility in the markets, but they're asking about underperformance in the fourth quarter and how the first quarter started. I think I mentioned this already. We started honestly quite well. January seemed to be a bad month, but it's been better than last year. In the three continents in which we are present, we see a better behavior than the market, and we see a margin improvement. The margin improvement we are better on. We are optimistic. Still very soon, and the year is long.
So as we usually do, we are happy with the task we carry now and with our position in the markets and the secure objective to reach and meet all of our commitments. And on that underperformance, you mentioned the fourth quarter. Well, I think it was just punctual, really. But there were some factors there. In North America, for example, there's a very important client for us, Stellantis. And as you know, the CEO was dismissed. So I mean, there wasn't an excess of stock in the U.S. They stopped production for, well, in the last quarter. So of course, that has had a big impact on us because they are a very important client in North America. So they have been one of the most important players. But those are factors that have an impact in one quarter or one month, but they are not recurrent.
There's something that's fully mathematical here. In the last quarter, well, we see growth in China. Not only the rest of the markets, you know, China is over 1/3 of global production, and a lower exposure to China. Well, that's the reason for some of that underperformance. If you compare us to the global markets, of course, there's a bit of underperformance. But if you compare us against the CIE mix, well, that basically disappears. So just that is to take into account the geographic mix and the effects on the different markets and the evolutions.
Now, talking about China, we just got a question about Chinese OEMs coming to Europe and CKD autos . So we might be losing this market due to the CKD models in Chinese companies entering Europe.
Well, we have a relationship with different Chinese clients, like BYD or Chery in different countries. I mentioned this already, but we also have worked with Chery in Mexico and also in Europe. What do Chinese OEMs do? They come to these new markets for them. The first few years, they use the CKD system. They know that's not what works in the future. They're going to do that in 2025, 2026. We're already negotiating with them to rationalize component production. We're there with them. We're working because the future, I mean, this is always temporary.
Now, thinking about the Chinese domestic market, the question is if we see limits in the drop of sales of CIE in this market and how the development of new products is going.
First of all, I'd say that China has been a great investment on our side with a great cash generation and a great return on that investment. So it's also true that underperformance we could have is linked to the growth of local manufacturers in China and I mean, we were focusing around the JVs between Chinese manufacturers and European brands. But let's not forget that we have different projects with different Chinese clients that we are developing and we're growing with both products to be able to increase our market share with those clients.
Question that's different. Margin in Brazil in the fourth quarter has been the lowest one in the year. That's why. The growth and the strong market, any reason behind it?
There's always a reason, as I mentioned earlier. In this case, in Brazil, we need to realize that negotiations there in September, in Brazil, wages increased by sometimes double digits, and of course, that has an impact. That does have an impact in October, so that's why after October, we have had the impact of that, and that's why our margin was reduced by a few points, but it'll just take a few months to translate that to our clients. That margin reduction won't be there in a few months, and closing the margin conversation, the margin in the last quarter was the worst of the year. Something extraordinary there, globally.
Well, it's basically what I mentioned, but having said that, the margin was 18.4 throughout the year, and in the best quarter, it was 18.6, and the worst one was 17.8. So we are talking about decimal points, really. And in a quarter in which the sales were 950. And throughout all of 2024, we have had quarters. I mean, in some quarters, 24 million vehicles, producing some others 20 million. So it's very important to look at comparables because, I mean, the difference between one quarter and another, we're talking about decimal points, really, here.
They've been talking about Tesla entering India. It seems that it's going forward. What do we think about their presence in India?
Well, I think we are one of the reference suppliers for these clients. They don't really allow us to say much about it. But we start in North America, then in Europe, and we have, I mean, we have a great presence in India. I'd like to remind you that we are one of the most important Western groups in India. Tesla is a key client for us in all the other continents. We have an excellent relationship with them at a very high level. They are a very important client for us.
In terms of capital allocation, we've mentioned it. Could we think about an intermediate measure of increasing recurring dividend or a stock repurchase program to be there for M&A instead of a one-off dividend?
As I mentioned earlier, you know that CIE, we are a company that thinks about everything. We take a look at all the different possible alternatives. As I mentioned earlier, the stock price of CIE is low, is very, very low. Of course, we focus around paying our shareholders. I think that we should also keep on growing and keep on investing, basically through inorganic growth. I cannot, at least today, mention our ideas.
But please bear in mind that CIE will be a company that will pay special attention to paying our shareholders, especially given its very strong cash generation. There's probably nobody in this sector that can generate that cash. And that cash flow comes from that equity. We hope to get to 19% this year. So that means that we are controlling our CapEx. And the rest is our objective this year of operating cash flow generation is EUR 500 million that are going to be used in inorganic growth or paying our shareholders and paying our debt because debt is now half our capital. So our capital is EUR 2 billion, and our debt is now a bit below EUR 1 billion. So we are a company with probably the healthiest balance, which will allow us to do many things. But of course, we don't lose sight of growth.
Growth that allows us to add value and growth that will allow us to provide profit revenue for our shareholders.
And in fact, I'm sorry if we've mentioned this, but when will the new strategic plan be here? They just asked the question. So we haven't finished the present one, but we are already working on the next one.
Of course, I mean, the leap forward in the past few years has been relevant. I'd like us to value it. And for CIE to feel even more enthusiastic, I think it's important to value what we've done in the past four years. We have generated over EUR 2.1 billion of operating cash flow in the past four years. We have reduced our debt very importantly. So I think we all need to understand what it all meant. Maybe in the next two quarters, we will be able to see that we are almost able to guarantee 100% of our commitments. So when that's done, we will start working on the next strategic plan. This new strategic plan, well, of course, be ambitious. That's how we are here at CIE Automotive. We hope that the market is able to value this new strategic plan as well.
One last question right now about what we think about consensus 2025. I've got the figures. EUR 4.1 billion in sales, EUR 780 million of EBITDA, EUR 585 million EBIT, and EUR 365 million in terms of net results. Debt, as it's here, EUR 791 million.
That was the concern. It's nice to hear how optimistic they feel about CIE. All the questions are of course, there's uncertainty and risks and tariffs. So many of the other things we've been talking about, but then consensus, I mean, they're all thinking CIE is amazing and it's going to increase margins and it's going to generate more flow, more cash flow. Given that we're not generating too much, we will probably generate more. We're going to reduce our debt, so it's great to listen to how much they trust the CIE Group. I mean, it'll be very hard to determine part of, well, I don't know, 98% or 102% of these. I know this knows very well. O nce again, it wouldn't make sense I mean, these questions about risk and these amazing results.
They're saying about EUR 780 million of EBITDA and, I mean, net benefits, and reducing our debt by EUR 210 million, basically. I'm sure we'll be around there, between 95% and 105%. Well, we'll be there. So that's going to be a challenge. And we trust CIE. Once again, as it always has, we can reach an all-time high, just like 2024. And that's also what happened in 2023 and 2022. So for 15 years, we've been hitting all-time highs. And so this year, probably as well, we'll fight for it. And still February, but we hope we'll reach an all-time high with the figures you just mentioned.
Great. No more questions.
Well, thank you very much. And not much more to say. Thank you very much. Thank you, everybody. And still, if there's anything else, we're here for you. Thank you, Jesús María, for being with us. And we'll keep on talking.
Great. Really, it's a true pleasure to be able to try to answer your questions and your concerns. Once again, it is truly an honor to see the trust you have in CIE. It is still a reference company in terms of profitability worldwide. I mean, it is great for the whole team at CIE Automotive.