Global automobile giants grapple with decreasing vehicle sales and thinning financial profits.
Global car giants are facing a slip in earnings and profits. As per a report by consultancy firm EY, published on Friday, these 16 giants recorded an 8% decrease in profits and a 2% decrease in sales in the initial half of the year. Most manufacturers are experiencing a more profound downturn, as Japanese automakers are currently gaining an edge due to the weak yen, inflating the average.
Japanese automakers witnessed a 14% surge in earnings and a staggering 37% hike in profits. However, German manufacturers lagged behind, registering a 0.4% revenue decline and a 18% profit decrease.
The automotive sector is distinctly worried about the state in China. As EY explained, "While there was a 2.9% sales growth in Europe and a minimal 0.8% rise in the US, Chinese manufacturers faced a 11.2% sales slump." Compared to this, German companies fared better, experiencing a 6.9% drop in China sales.
EY's research indicated that the most financially successful company was the South Korean manufacturer Kia, boasting a profit margin of 13.1%. Despite decreases of around 2-3 percentage points, German manufacturers Mercedes-Benz (10.9%) and BMW (10.8%) held the second and third positions in terms of profit margin. Stellantis (from 13.8% to 7.8%) and Tesla (from 10.5% to 5.9%) underwent substantial profitability declines.**
The manufacturing of motor vehicles by global car giants is not immune to challenges, as evidenced by the 8% decrease in profits and 2% decrease in sales in the first half of the year. Japanese automakers, benefiting from the weak yen, have witnessed a significant boost in earnings and profits, with a 14% surge in earnings and a 37% hike in profits.
