Korean Media: German Auto "Big Three" Operating Profit Plummets 75.7%!
On January 12, South Korean media company Asia Economic published an article stating that due to the decline in the German automotive industry, its operating profit has dropped to the lowest level since the global financial crisis.
EY, a consulting company, analyzed the financial data of 19 global automobile manufacturers and found that the combined operating profit of the three major German automakers - Volkswagen, BMW, and Mercedes-Benz - in the third quarter of last year was 1.7 billion euros, the lowest level since the third quarter of 2009.
Compared to the third quarter of 2024, the operating profit of these three German companies fell by 75.7%. During the same period, the operating profit of Japanese companies decreased by 29.3%, while that of American and Chinese companies also declined by 13.7%, but the decline was much smaller than that of German companies.
EY pointed out several factors leading to the downturn in the German automotive industry: declining competitiveness in the luxury car market, U.S. tariff policies, unfavorable exchange rates, rising costs of electric vehicle investments, and restructuring costs. EY's automotive industry expert Konstantin Galk said, "All these factors have created a storm for German automobile manufacturers."
The German automotive industry is facing difficulties, especially in China, the world's largest automobile market. The rapid growth of China's automotive industry, along with slowing economic growth, is causing high-income Chinese consumers to gradually abandon purchasing German luxury cars.
The market share of German automobile manufacturers in China fell from 39.4% in the third quarter of 2020 to 28.9% in the third quarter of last year, the lowest level since 2012. Porsche, a luxury sports car brand under Volkswagen, reduced its number of dealers in China from 144 to 80.
With declining profitability, German companies are carrying out large-scale restructuring, strengthening their internal combustion engine car product lines, and slowing down the transition to electric vehicles. The German government has also asked the EU to reconsider its plan to ban the sale of internal combustion engine vehicles in the EU by 2035.
Galk said, "People had expected electric vehicles to grow rapidly, but this expectation has not been largely realized, at least in Western markets, where electric vehicle sales have only slightly increased."
Original: toutiao.com/article/1854071847202826/
Statement: This article represents the views of the author.