Global car sales decline for the first time since the financial crisis. The profit margin of the 16 leading auto companies has fallen to its lowest level since the financial crisis. Toyota and Suzuki work more profitably than the German carmaker: But that the profit margin of VW, Daimler and BMW is shrinking, is mainly due to the high investments in the future.
Strong headwind for the global auto industry: Trade conflicts, higher tariffs, rising commodity prices and high research and development spending have led to declining auto industry margins in the third quarter. Although the total turnover of the world’s top 16 car companies rose by 2.3 percent, according to a study by the auditing company EY. By contrast, the number of vehicles sold fell by 3.7 percent for the first time since the crisis year 2009, and the operating profit (EBIT) shrank by 3.3 percent.
Overall, things did not go well for the German auto companies in the past quarter as well: their total sales fell by 2.7 percent, slightly less than the average for all corporations. However, operating profit declined by 7.6 percent, while revenue increased by only 0.5 percent.
The Japanese corporations performed significantly better, not least as a result of the weak yen. Although the total turnover of the six Japanese auto companies only increased by 1.5 percent, sales fell slightly by 0.3 percent. Against the trend, however, the Japanese companies were able to increase their operating profit by 5.4 percent.
Especially Toyota drove the competitors in the third quarter of it: The Japanese carmaker was able to increase both sales – by just under 2 percent – and sales and operating profit – by 2.3 and 10.9 percent – and thus leads in the third Quarter sales, sales and profit.
Toyota and Suzuki currently more profitable than BMW, Daimler and VW
Only in the margin was there a company in the third quarter Toyota: Suzuki Show stock market chart achieved a margin of 8.7 percent, followed by Toyota Show stock market chart (7.9 percent) and BMW (7.1 percent). A year earlier was still BMW Show stock market chart With a margin of 10.1 percent, the most profitable carmaker in the world has been BMW now in third place.
Daimler Show stock market chart slips from third to fifth place in the margin ranking, Volkswagen Show stock market chart is ranked seventh with a margin of 4.9 percent (previous year: 13th place). These are the results of an analysis of the financial figures of the 16 largest car companies in the world, which the audit and consulting firm Ernst & Young (EY) compiles on a quarterly basis.
“The third quarter was disappointing for many auto companies, and by the end of the year the situation is unlikely to improve much,” says Peter Fuss, Partner at EY. “Sales in China and the US are falling, while in Europe the switch to the globally uniform WLTP emission test method has led to some significant declines in sales.” The global economy has deteriorated and a further escalation of the US-China trade war is not ruled out To further reduce the buying mood in the important Chinese market. “
“For the German car companies, the situation is currently difficult: First, the aftermath of the diesel crisis, which has already cost the German carmaker more than 30 billion euros, further burdens,” adds Fuß.
Also the fourth quarter will not turn out to be glamorous for the German automobile industry, expects foot. “From next year, however, the tide should turn around again, then WLTP will no longer be an issue, and by the middle of the year, electric vehicles will increasingly become the focus, because then the hot phase in the race for market leadership in electromobility and around the future technology leadership “.
Investments will continue to rise and weigh on profits
Along the way, companies will invest billions more in digital strategy, electromobility, and autonomous driving-all of which will not directly translate into increased sales or profits, says Constantin Gall, Head of Automotive & Transportation at EY. “Therefore, the industry has to adjust to lower margins than in the previous boom years,” expects Gall. The profit margin of the companies analyzed was already at 5.3 percent in the third quarter, the lowest level since 2009.
Overall, the analyzed companies invested a good 34 billion euros in research and development in the first half of this year, an increase of 4.1 percent over the previous year. While German companies increased their R & D spending by almost 10 percent to 12.4 billion euros, investments by Japanese carmakers remained unchanged at 10.3 billion euros. The US auto companies also kept their R & D spending at 8.1 billion euros.
Germany before USA and Japan: No one works as much money in research and development as the German carmaker
The R & D ratio, ie the share of R & D investment in total revenue, rose from 4.6 to 5.0 percent for the German auto companies, while it remained at 4.4 percent for US companies and 4 percent for Japanese automakers , 2 dropped to 4.0 percent.
“Despite the recent rather weak sales and profit development and the burdens from the diesel crisis, the German auto companies are particularly reluctant to innovate,” observes Gall. “And in light of the impending reorganization of the industry, they are indeed well advised not to let up on their innovation efforts and we will see dramatic changes in the market over the next decade, fueled by the megatrends of electrification, networking and autonomous driving Take sums in hand and also have the willingness to enter into unconventional partnerships. “
Austerity measures and new alliances
Not only the profits of the companies sink at present – also the stock prices developed weakly recently: Of the 16 enterprises could increase PSA with only one car company its stock exchange value in the year-to-date so far, altogether the market capitalization of the analyzed enterprises decreased since the beginning of the year by 19 per cent or well $ 150 billion to just under $ 664 billion.
“Given declining profits and stock prices, we will see new rounds of business hikes in the coming years,” says Gall. “Because in such volatile times, the companies have to be leaner – both in internal processes as well as in production and in the variety of models.”
Moreover, the car companies would hardly be able to cope alone with the upcoming substantial investments in the future – cooperation and alliances are therefore more valued than ever, emphasizes Gall: “Technology leaps like the development of autonomous vehicles can hardly be tackled alone – that takes too long and becomes too costly his.”
Gall therefore expects that in the coming years, new alliances and thus a new power structure within the industry will emerge: “Who can forge the most promising alliance, who can establish platforms and set standards on which other players must orient themselves? be crucial issues for years to come. “
la / mmo