Stuttgart: Germany’s leading car manufacturers lagged behind much of the global competition last year, struggling with weak sales and falling profitability, according to an analysis by auditing and consulting firm EY.
While Volkswagen reported a slight sales increase last year, BMW and Mercedes-Benz saw declines, leading to an overall revenue drop of 2.8% for the German trio.
In contrast, the combined sales of the 16 largest global automakers analysed by EY grew by 1.6%, surpassing the €2 trillion or about US$2.2 trillion mark.
Although German manufacturers still accounted for nearly 30% of this total – generating €613bil – their market share shrank compared with the previous year.
Among the major global players, only Stellantis fared worse in terms of sales growth, with the parent company of Opel recording a 17% decline.
German carmakers also struggled in terms of operating profit, falling well behind Japanese and US manufacturers, which performed significantly better.
EY market analyst Constantin Gall attributed the difficulties of German automakers to weak sales and costly investments in electric mobility, which have yet to deliver expected returns.
“Demand is nowhere near as strong as hoped,” Gall said, pointing to additional challenges such as software failures, restructuring expenses and recalls.
In 2023, premium brands were still able to charge high prices, Gall explained.
However, he noted that this has changed, as economic uncertainty and global conflicts have significantly weakened demand, forcing competition to shift back to pricing. — dpa
