According to a new evaluation, the world’s largest car companies continue to grow significantly. Compared to the same period last year, sales in the second quarter of the year increased by 18.1 percent, earnings before interest and taxes (EBIT) grew by 31.3 percent. Sales also increased by more than a tenth between April and June. This is the result of an analysis published by the auditing and consulting company EY on Monday. Except for Tesla and Ford, all companies were able to increase their profits. The significant earnings growth was fueled by the weak yen, which helped Japanese manufacturers to increase by 91.2 percent. The development in German companies was more restrained, with operating profits rising by a good 19 percent. US automakers, on the other hand, recorded a decline of 5.7 percent.
Profitability – measured by the EBIT margin, which puts the operating result in relation to sales – was 8.8 percent in the second quarter. That was 0.8 percentage points more than a year earlier. These ten car manufacturers performed best:
10th place: Volkswagen
The Wolfsburg car company is currently working on the “biggest conversion in decades”, CEO Oliver Blume recently announced that the individual VW brands would be trimmed for efficiency. In the second quarter, VW increased its margin from 6.5 percent to 7.0 percent. According to the study, between April and July Volkswagen was the top-selling automaker in the world with sales of just over 80 billion euros.
9th place: Mitsubishi
The Japanese manufacturer recorded a return on sales of 7.1 percent after 5.8 percent in the same period last year. Operating profit rose sharply by 47 percent to 223 million euros.
8th place: Suzuki
The small car manufacturer from Japan occupied top positions in terms of returns for years. But those times are apparently over. In the second quarter, Suzuki still recorded a margin of 8.3 percent after 7.0 percent in the previous year. Operating profit grew by 34 percent to 668 million euros.
7th place: Honda
Especially in the US market, which is traditionally important for the group, Honda grew in the second quarter: the group increased its sales there from 240,000 to 347,000 vehicles. The return on sales increased significantly by 2.7 percentage points to 8.5 percent.
Honda production
The Japanese manufacturer was able to significantly increase its profit margin.
(Photo: Reuters)
6th place: Tesla
In the price war for market share, the US carmaker has lowered the prices of its electric models several times in recent months. This is reflected in the return: Tesla’s margin collapsed and was 9.6 percent between April and July after 14.6 percent in the same quarter of the previous year.
5th place: Hyundai
In the second quarter, the South Korean automaker generated an operating result of almost three billion euros, an increase of 42 percent. The return rose from 8.3 percent to 10.0 percent.
4th place: Toyota
The largest Japanese carmaker leads the list of companies examined in terms of both profit and sales: Toyota recorded an operating result of 7.5 billion euros in the second quarter with more than 2.7 million vehicles sold. The margin grew by a whopping 3.8 percentage points to 10.6 percent.
Toyota
The Japanese carmaker leads the list of companies in both profit and sales.
(Photo: IMAGO/ZUMA Wire)
3rd place: BMW
Thanks to full order books and higher prices, the Munich-based premium manufacturer significantly increased its operating profit in the second quarter by 27 percent to 4.3 billion euros. The return on sales rose to 11.7 percent after 9.9 percent in the same period of the previous year.
2nd place: Kia
With sales of 18.3 billion euros in the second quarter, Kia is one of the smaller manufacturers in the study. However, the South Korean group is far ahead in terms of margin: the group generated a return on sales of 13.0 percent after 10.2 percent in the same period of the previous year.
1st place: Mercedes-Benz
CEO Ola Källenius has completely renovated Mercedes-Benz and geared it towards profitability with a luxury strategy. This is also reflected in the result: from April to June, the group generated an operating profit of almost five billion euros. The return grew slightly and was 13.0 percent – also a top value among the compared manufacturers.
Mercedes boss Ola Källenius
The group generated a return of 13 percent in the second quarter.
(Photo: dpa)
The days of dream margins could soon be over
The head of the Western Europe mobility division at EY, Constantin Gall, said: “Car production is currently being ramped up, a comfortable cushion of orders enables significantly more deliveries at still very good prices.” Overall, the profit situation is still very good. In addition, the companies have managed to keep profitability high.
However, Gall warned that the days of these margins would soon be over for many car manufacturers: “We will probably see how the market turns this year.” Because when the orders from the time of the chip shortage have been processed, the car manufacturers would have to the new reality of economic weakness, falling demand, price pressure and overcapacity. With consequences: It is becoming increasingly difficult for them to enforce high prices on the market and to forego discounts. Against this background, Gall is also anticipating a new wave of cost reductions in the automotive industry.
“Many corporations are currently operating very profitably and will not allow any cuts in their margins in the future either,” said Gall. You would now have to pay more attention to all types of costs – such as expenditure on personnel. “Especially in Germany, with its very high energy and labor costs and the high tax burden, the pressure will increase significantly again.”
Above all, a slowdown in the dynamics of electric cars, which is very likely in Germany, will really hurt many companies. With agency material
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First publication: 08/28/2023, 4:56 p.m.