Return on investment (ROI)

We use return on investment (ROI) to efficiently manage the use of resources in the Automotive Division and to measure the success of our endeavors. ROI is defined as the return on invested capital for a particular period, and enables us to measure the earning power of our products, product lines and projects.

ROI is calculated as the ratio of operating result after tax (including the proportionate operating result of the equity-accounted Chinese joint ventures) to average invested capital. Based on our companies’ income tax rates, which vary from country to country, we assume an overall average tax rate of 30% when calculating the operating result after tax. Invested capital is calculated as total operating assets reported in the balance sheet (property, plant and equipment, intangible assets, lease assets, inventories and receivables) less non-interest-bearing liabilities (trade payables and payments on account received) and a proportionate share of the corresponding items in the accounts of the equity-accounted Chinese joint ventures. Average invested capital is derived from the balance at the beginning and the end of the reporting year.

In fiscal year 2025, ROI decreased to 4.8 (9.9)% year-on-year due to the lower operating result and the rise in average invested capital, and was thus below our minimum required rate of return of 9%.