Latest quarterly reports - Research Reveals: German Automakers Begin 2023 with a Shock Absorber
In the beginning of the new year, German automakers faced a setback when they were compared to other international companies by the auditing and consulting firm EY. These three top German car manufacturers - Volkswagen, BMW, and Mercedes-Benz - had a revenue decline of 1.7% and a profit decrease of 25% compared to most of their rivals. Together, they earned around 148 billion euros. This was still the second-highest value for the first quarter since the study began.
EY analyzed the financial data of the 16 largest car manufacturers worldwide to reach this conclusion. Since 2011, this study has been conducted.
The total revenue of all companies increased by 3.9%, reaching approximately 493 billion euros in the first quarter. The earnings before interest and taxes (EBIT) were about 33.8 billion euros, which was 0.7% higher than the previous year. Japanese car manufacturers were particularly impressive, showing an 87% profit increase and a 17% rise in revenue. This growth was a result of the falling value of the yen, which made Japanese products cheaper abroad and led to currency gains.
Kia was the most profitable car manufacturer at the start of the year, with an EBIT margin of 13.1%. South Korean cars were ranked first, followed by BMW (11.1%) and Mercedes (10.8%). Stellantis had been the most profitable company in 2023 before Mercedes. Opel did not provide any information about their profit. Tesla's profit margin dropped from 11.4% to 5.5% in the previous year.
Gall, who observes the EY market, points out that the struggles for the automotive industry are growing. "In the first quarter, the top car manufacturers witnessed a slight decrease in sales, and the demand is still far from that of pre-pandemic levels," he explained. From January to March, companies sold around 15.5 million cars - three million fewer vehicles than in the first quarter of 2019.
Gall doesn't expect a quick recovery, as the economy is weakening, geopolitical tensions and wars create uncertainty worldwide, and the future of electromobility remains uncertain. In Europe and the USA, electric car sales have been disappointing. As a result, automakers need to invest in multiple drive systems simultaneously.
In addition, the Chinese automotive market is proving challenging for Western manufacturers. "Owners of domestic brands are gaining more market share, especially in the electric segment. The competition is intense," Gall noted. While car manufacturers saw a 3% increase in passenger car sales in Europe and a 5.7% increase in the USA, their sales in China decreased by 2%. In the first quarter, 33.2% of their total global new car sales were in China.
