February 24, 2024

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Automotive industry: bad situation – huge profits

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Semiconductors are currently primarily installed in expensive models with high molding.
© dpa

Many car manufacturers like Mercedes are making a profit. However, experts warn about the dangers. In China, sales are no longer smooth.

According to consulting firm EY, the situation in the automotive industry is much smaller than the key figures from manufacturers suggest. The sale of new cars in China comes under pressure because of the closure of the corona there. This was reported by EY (Ernst & Young) in a study on the business statistics of the 16 largest automotive companies in the world. Among them are Volkswagen, Mercedes-Benz and BMW.

China is the largest market for three German groups. “The end of China’s authoritarian corona policy has not yet been announced, so there is a risk of further sales decline in the coming months,” warned EY industry consultant Peter Fuss. According to China industry figures, car sales to consumers decreased by 35.7 percent in April compared to the same month last year.

On average, major manufacturers sold fewer cars worldwide from January to the end of March compared to the same period last year. But companies usually earned better revenue, as research showed. In terms of return on sales, which compares sales and operating profits, the American electric car manufacturer Tesla was clearly ahead of 19.2 percent. In the list of major companies, Mercedes-Benz follows with 15 percent, Volkswagen with 13.3 percent and BMW with 10.9 percent.

“The clear numbers for the first quarter are excellent, but the realities in the automotive industry are very worrying,” summed up the head of the Western European mobility unit at EY, Constantin Gall. Above all, manufacturers of luxury cars benefit from a unique situation: Considering the lack of chips, semiconductors are installed mainly in large and expensive cars. At the same time, there is no reduction in prices, as demand is high. However, according to Gall, the increase in profits will surpass other companies. (dpa)

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