According to a study, the global auto industry has already implemented more in the first quarter and also earned more money operationally than before the Corona crisis. The consulting firm’s industry survey showed that the largest automaker’s profit before the deduction of interest and taxes EY according to a ten-year comparison even to the highest value ever measured in a starting quarter. The study was available to the German Press Agency on Monday.
Analysis of financial ratios
The quarterly EY calculations are based on the financial ratios of the 16 largest automakers. Assuming constant exchange rates, the industry giants generated sales of 403 billion euros between January and the end of March – around 35 billion more than in the previous year and only around 5.8 billion less than in the record year 2018.
The operating profit rose even more significantly: if you leave out Renault and the Stellantis Group with brands such as Citroën, Opel and Peugeot because of missing information, you get a value of 29.4 billion euros. The operating profit for the industry was almost a third higher than in the previous, decisive first quarter of 2017.
Adjustment of fixed costs
EY auto expert Peter Fuß also attributes the records to the fact that many car companies had already launched austerity programs before the corona pandemic, some of which were tightened again in view of the pandemic. “The first quarter results show that some companies have actually made progress in adjusting their fixed costs.” It is also noteworthy, however, that the ramp-up of new drive technologies such as electromobility and a significant increase in sales of electric cars and plug-in hybrids did not have a noticeable negative effect on the margin. In April 2021, more new plug-in hybrids and electric cars than new cars with diesel engines were sold in Germany for the first time.
Whether the hunt for records will continue depends crucially on the further development of the still unresolved chip crisis, which repeatedly causes production stops at numerous car manufacturers. Fuss says: “The delivery bottlenecks for semiconductors lead to sometimes considerable restrictions in production, several million vehicles are unlikely to be built in the course of this year.”
Important Chinese market
In terms of sales, the auto industry has not yet reached the pre-crisis level anyway. According to the study, global car sales increased by 15 percent year-on-year, but at 16.9 million vehicles they were still 9 percent lower than in the first quarter of 2019. The Chinese market is gaining in importance – also for the three German car companies. Overall, Volkswagen, BMW and Daimler handed over around four out of ten new cars to a Chinese customer in the first quarter – in the same quarter of the previous year, China’s share of total sales was slightly lower.
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