German car manufacturers turned in their worst quarter since the days of the 2009 global financial crisis, according to a report released by financial consultancy EY.
Together, earnings before interest and taxes (EBIT) at Germany’s biggest automakers, Volkswagen, BMW and Mercedes-Benz, plummeted by nearly 76% in the quarter between July and September.
The statistics indicate that although sales and revenue remained stable, production and running the business has become much more expensive, and carmakers are earning less from sales.
Between July and September, the earnings amounted to €1.7 billion ($2 billion), the lowest since quarter 3 in 2009, the study showed.
The average EBIT of 19 of the world’s larges carmakers in the study shrank by 37% to around €18.9 billion — the lowest since 2018.
EBIT is a measure showing a company’s profit from core operations, and excludes effects on the bottom line from financing and taxes.
EY’s report had Germany as the worst-performing car manufacturing nation in its analysis in terms of profit and revenue.
The global auto industry has been in the midst of a profitability crisis for a while, with EY noting that a weak market, high tariffs, adverse exchange rates and big EV and restructuring investments have all contributed to dragging it down.
EY automotive expert Constantin Gall explained: “The global automotive industry is in a deep crisis. However, it is currently the German car companies that are suffering particularly badly.”
Germany’s auto industry is a key pillar of the country’s economy.
EY called the automobile market extremely competitive, adding that a weakening economy has impacted the sale of premium segment cars, though sales of electric vehicles are growing steadily.
BMW outpaces German rivals
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