Customers pay a lot of money for cars. Nevertheless, the manufacturers are not satisfied: the change to e-mobility is putting the automotive industry under pressure. The recently extremely high profit margins are suffering as a result.
After years of record margins, car manufacturers’ profits are falling back to normal. On average, the EBIT margin for the ten most important international industry representatives was 7.1 percent in the first quarter. This is the lowest value in three years, as determined by the Center of Automotive Management (CAM) in Bergisch Gladbach. After manufacturers were recently able to produce high-margin models amid high demand and simultaneous delivery bottlenecks, they are now suffering from high interest rates on capital and geopolitical uncertainties .BMW and Mercedes aheadThe German premium manufacturers BMW and Mercedes remain the most profitable car manufacturers in the first quarter with operating returns of around 11 percent. Toyota, the largest volume manufacturer, follows with 10 percent. General Motors was also able to increase its margin to 8.7 percent. The Volkswagen Group was in the middle of the field with a total return of 6.1 percent, just ahead of Hyundai (5.8 percent) and Honda (5.6 percent). The electric car manufacturers Tesla (5.5 percent) and BYD (4.6 percent) suffered from the weak market ramp-up and the price war in some markets. If we only look at the core business, the average profit per vehicle fell to 2,253 euros – a loss of 19 percent compared to the whole of 2023. Here too, the German premium manufacturers are doing better than the overall market, with Mercedes and BMW each coming in at a good 4,000 euros. For the year as a whole, however, the value was still 5,000 or 7,000 euros. Expert tip for car manufacturers According to CAM head Stefan Bratzel, the industry is in a quandary: On the one hand, they have to increasingly offer low-emission and electric vehicles, but on the other hand, they don’t make any money earn. Bratzel advises German manufacturers in particular to further reduce costs along the electric car value chain and at the same time focus on innovation in order to be able to justify the higher list prices to customers compared to new competitors from China. “German car manufacturers in particular have to be at least as much more innovative and better as they are more expensive.”
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