Status: 03/25/2022 09:17 a.m
Despite the lack of chips and the Corona crisis, the world’s largest car companies made significantly more profits last year. Mercedes-Benz, Toyota and Volkswagen, in particular, achieved a large plus.
Despite the chip crisis, international car manufacturers earned significantly more last year. The operating profit (EBIT) of the world’s 16 largest car companies climbed by 168 percent year-on-year to a total of around 134 billion euros, as determined by the auditing and consulting company EY. With almost 25 billion euros, the world’s largest manufacturer Toyota is at the top, followed by Volkswagen and Mercedes-Benz.
“Overall, the top car companies managed the semiconductor crisis remarkably well last year,” said Constantin Gall, EY expert for mobility in Western Europe. Although sales are declining for many companies, the profit situation has “developed excellently in some cases”.
A lack of chips causes production downtime
According to the consulting firm Goldman Sachs, since the beginning of the corona pandemic, high demand and the supply bottleneck for semiconductors and other electronic components have caused massive problems in 169 sectors – including the automotive industry. Across the industry, the lack of chips led to lost production.
A quick improvement is not in sight. Car manufacturers continue to expect bottlenecks in electronic components this year. “Even in 2022 we will not be able to build all the cars that we could sell,” said VW boss Herbert Diess in February. Daimler boss Ola Källenius and BMW boss Oliver Zipse had made similar statements in the past few months.
Margins still at record level
However, the crisis is not hurting manufacturers’ profits – on the contrary. “Margins were at record levels in 2021,” said EY expert Gall, referring to the ratio of profits to sales at the world’s largest corporations. In the third quarter alone, operating profits rose 11 percent year over year to a total of $23.1 billion – an unprecedented level.
The strategy of installing the scarce chips primarily in comparatively expensive cars and at the same time limiting discounts has paid off for the companies. According to EY, the US electric car manufacturer Tesla performs best in terms of profit margin compared to the industry giants. He achieved a value of 12.1 percent, just ahead of BMW and Mercedes-Benz, which each achieved twelve percent.
The US electric car maker achieved its sixth consecutive delivery record in the last three months of the year. Tesla sold almost a million cars in the full year – 87 percent more than in 2020. Toyota, Volkswagen and General Motors sold the most vehicles in 2021.
Further delivery bottlenecks due to the Ukraine war
According to EY, the chip crisis hit German manufacturers in particular, whose sales fell by four percent. Volkswagen, for example, had to massively shut down production last year because of the lack of semiconductors in its main plant. The carmaker produced 330,000 fewer vehicles than originally planned. Competitors from Japan, on the other hand, increased by five percent, and South Korea by as much as seven percent.
The industry is also struggling with problems this year, said EY partner Peter Fuss. “On the one hand, the lack of semiconductors and other preliminary products and raw materials is hampering production. On the other hand, the war in Ukraine is also putting an enormous strain on the industry.” In view of these uncertainties, forecasts for this year are hardly possible. The industry drives on sight – “and new car prices will rise rather than fall,” said the expert.
The ongoing Russian onslaught is slowing down German automakers because suppliers are unable to deliver individual parts on time – especially cables from Ukraine. VW, BMW and Mercedes have already had to cut production.