Study: The carmakers’ profits have broken so hard

The world’s largest carmakers viewed a rich slump together in the first half of the year. As can be seen from a study by the examination and consulting company EY, the operational profit (EBIT) of the 19 largest carmakers is almost halved (minus 49.2 percent). From January to June it was 42.8 billion euros, after 84.3 billion euros in the previous year. Sales stagnated in total.

In view of the falling profits, the established western auto industry is in a deep and structural crisis, said Ey car expert Constantin Gall. E-cars sold significantly weaker than assumed and there was a ruinous price competition on important sales markets. “The problems in China are increased by the fact that the buyer is increasingly turning to national brands,” said Gall. In addition, high transformation and restructuring costs, recalls and supply chain disorders caused problems.

Expert: “The storm will not be faded out”

The weak phase of the industry will continue for the time being, forecasted Gall. “The storm won’t be stopped,” he said. The expert justified this, among other things, with a weakly lasting economy, and the geopolitical situation and customs policy would not be foreseeable. “For many manufacturers, the complete business model is at stake, for some manufacturers the question of existence will arise in the medium term,” said Gall.

It is all the more important that the car companies make hard decisions. “The good old days don’t come back, the industry has changed fundamentally, and the automotive industry has to find an answer,” said Gall. The car companies would have to separate from contaminated sites, reduce it much too large portfolio and focus – on clearly defined customer segments, on a delimited, competitive range of models. “Size is not everything, size can also prove to be a brake block when it comes to adapting to new circumstances,” said Gall.