Japan's most profitable competition: the German auto industry weakens

economy

Tuesday, November 27, 2018

High commodity prices, investment in electromobility and higher prices are driving increased profitability for automakers around the world. Especially the German manufacturers are down in the rankings. The new seller comes from Japan.

German builders are no longer leading the sector. As the consulting firm EY has announced, the Japanese competition in the third quarter in terms of sales, turnover and profit compared to the Germans. However, the auto industry is facing a headwind around the globe. "Global trade disputes, rising tariffs, rising commodity prices and high innovation spending have led to lower margins in the global automotive industry in the third quarter," says l & # 39; study.

Total profits of the world's 16 largest auto companies fell 3.3% in the third quarter, with the average margin (earnings before interest and taxes as a percentage of sales) falling to 5.3%, the lowest level since the financial crisis. But as Japanese companies gained profitability, German manufacturers lost momentum. Nobody invests as much in the future as them.

The sales champion is currently Toyota: the group sold 2.68 million cars between July and September, the Volkswagen group sold 2.41 million cars. The Japanese were able to increase their sales by 1.9% compared to the same period last year, while Wolfsburg had lost 2.6%. BMW gave way to Suzuki and Toyota, with margins of 8.7% and 7.9% in the third quarter. BMW follows in third place with 7.1%, which is significantly less than in the same period last year, while Munich was still double-digit.

Volkswagen is counting on the future

"The third quarter was disappointing for many automakers and by the end of the year, the situation is unlikely to improve," said Peter Fuss, a partner at EY. However, German manufacturers in particular have significantly increased their investments by almost 10% to 12.4 billion euros. More than half of this sum is reserved for Volkswagen. Japanese manufacturers invested 10.3 billion euros.

"Despite the rather weak development of sales and profits and the burden of the diesel crisis, German automakers are particularly reluctant to innovate," Fuß said. Given the upcoming restructuring of the industry, that would make sense.

Source: n-tv.de