German car manufacturers in the first half of this year
Higher spending and fewer sales in China have burdened German carmakers in the first half of this year: The profits of the two manufacturers, Volkswagen and BMW, both decreased significantly compared to the previous year, as announced by the two companies on Thursday. Mercedes had already reported a significant drop in profits last week.
BMW achieved 14.6 percent less profit in the first half of this year than in the first six months of 2023. At that time, the company reported an excess of 6.6 billion euros, which was 5.7 billion this time. Revenue decreased by 0.7 percent in the same period. The profit margin fell from 10.6 to 8.6 percent.
In addition to intense competition, particularly in China, where there has been persistent buyer hesitation, higher material and fixed costs, as well as increased spending on research and development, have affected the results, BMW explained. In China, 4.3 percent fewer cars were delivered in the first half of the year compared to the previous year. "The market development in China has fallen short of our expectations so far." Overall, sales remained stagnant at around 1.2 million cars sold compared to the previous year.
Europe's largest carmaker, Volkswagen, also earned significantly less from January to June than in the same period last year. The consolidated net income was 7.3 billion euros, a decrease of 13.9 percent. Revenue increased by 1.6 percent in the same period, but the profit margin fell from 7.3 to 6.3 percent - "not enough for our ambitions," said Chief Financial Officer Arno Antlitz.
Volkswagen's net income decrease of 13.9% in the first half of the year, amounting to 7.3 billion euros, was considered "not enough for our ambitions" by Chief Financial Officer Arno Antlitz, revealing the company's struggle with profitability similar to BMW's. The bad market conditions in China, characterized by buyer hesitation, intense competition, and increased costs, have significantly impacted both German carmakers.
