According to the consulting company EY, the situation in the automotive industry is less rosy than the key figures from manufacturers suggest. This is how new cars are sold in China because of the corona lockdowns there negative pressure. This was reported by EY (Ernst & Young) in a study on the business figures of the 16 largest car companies in the world. Among them are Volkswagen, Mercedes-Benz and bmw.
China is the largest single market for the three German groups. “An end to the rigorous corona policy of the Chinese authorities is not yet in sight, so there is a risk of further sales declines in the coming months,” warned EY industry consultant Peter Fuss. According to Chinese industry data, sales of cars to consumers fell by 35.7 percent in April compared to the same month last year.
Volkswagen is particularly affected. In China, the Wolfsburg-based company’s largest market, deliveries fell by half due to production restrictions in the fight against the pandemic. But the carmaker also sold significantly less in other regions than in the same quarter of the previous year. In April, the Group brought 516,500 vehicles to customers worldwide, that is 37.8 percent less than a year ago, as Volkswagen announced in mid-May. Volkswagen only delivered 1.9 million vehicles in the first quarter, which was almost 22 percent fewer than a year earlier.
More turnover despite falling sales figures
On average, major manufacturers sold fewer cars worldwide from January to the end of March compared to the same period last year. But the companies usually earned better, as the EY study also shows. In terms of return on sales, which compares sales and operating profit, the US electric car manufacturer Tesla was clearly ahead at 19.2 percent. In the ranking of the industry giants, Mercedes-Benz follows with 15 percent, Volkswagen with 13.3 percent and BMW with 10.9 percent.
The carmaker bmw even benefited from higher demand and increased prices in 2021 and made more profit than ever before. The bottom line was that almost 12.5 billion euros remained in the till, more than three times as much as a year ago. The trend continued in the first quarter of the current year. Also the competitor Mercedes was able to shine in sales and profits in the first quarter.
“The bare numbers for the first quarter are excellent, but the actual situation in the auto industry is extremely tense,” summed up the head of mobility division Western Europe at EY, Constantin Gall. Above all, manufacturers of luxury vehicles benefit from an exceptional situation: In view of the lack of chips, semiconductors are installed primarily in large and expensive cars. At the same time, there are hardly any price reductions, as demand is high. However, the profit boom will pass some companies by, said Gall.