Volkswagen is the world’s largest car manufacturer, but it is not the most successful. New research has shown that the world’s most profitable car manufacturer comes from Germany.
Consulting firm EY investigated the matter Business figures from the 16 largest car companies in the world. Result: Mercedes is the most profitable. With a profit margin of 13 percent. Japanese giant Toyota comes in second place with a profit margin of 12.6 percent, closely followed by Munich-based competitor BMW (11.3 percent). Volkswagen follows closely behind with a profit margin of “only” 6.2 percent.
The research looked at the so-called earnings before interest, tax and depreciation (EBIT) margin of companies. This means that we looked at the percentage remaining when deducting total costs from total income. For example, to ensure a correct comparison of the numbers, different taxes around the world are not taken into account.
This is what the future of car manufacturers looks like
Overall, automakers were able to increase their sales in the third quarter, according to EY calculations. Accordingly, revenues of the 16 largest car companies rose by 11 percent to 504 billion euros compared to the same period last year, and earnings before interest and taxes (EBIT) rose by 35 percent to 39 billion euros.
“However, things are no longer going so smoothly in the global auto industry,” says Konstantin Gal, automotive expert at EY. “Next year will be a very big challenge,” he says. Gall cites the three biggest problems facing automakers: declining demand for new cars, stagnant growth in electric mobility, and increasing price pressure.
‘Imminent rounds of layoffs’
The resulting problems can be annoying for company employees, among other things. According to the EY expert, more and more manufacturers are responding with discounts, affordable financing offers and special promotional models. But this puts pressure on the margin. To expand their market position, car manufacturers spend a lot of money and thus reduce their profits. According to Gall, many companies are also looking to cut costs. This also means that there may be layoffs.
Sample discounts on new cars return: “Only one category excluded” (+)
Premium of up to 5,000 euros for an electric car: the government announces the terms and in small print (+)
‘This makes me stop’: Is an e-car more likely to catch fire in a crash? Our automotive expert attends the crash test (+)
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