BERLIN, Aug. 28 (Xinhua) — The world’s 16 largest carmakers are sustaining their progress trajectory, with complete gross sales within the second quarter (Q2) rising 18.1 p.c year-on-year to a report 515.8 billion euros (557.4 billion U.S. {dollars}), in keeping with consulting agency Ernst and Young (EY).
Total earnings earlier than curiosity and taxes elevated 31.3 p.c to nearly 39.6 billion euros. This was “driven by the weak yen, which helped Japanese carmakers” nearly double their earnings, EY mentioned in a market evaluation printed on Monday.
Although German carmakers’ earnings elevated by 19.1 p.c in Q2, there was “more subdued profit growth,” whereas the earnings of U.S. automotive firms fell by 5.7 p.c, in keeping with the evaluation.
The world’s largest automotive producers have to this point been in a position to “keep profitability way up,” however the market is prone to “turn around before the end of the year,” warned Constantin Gall, managing companion and mobility chief at EY for the Europe West area.
“Because once the orders from the chip shortage period have been processed, carmakers will be confronted with the new reality: economic weakness, falling demand, price pressure, overcapacity,” he added.
Chinese producers are “gaining more and more market share in China, especially in the electric segment,” Gall mentioned, stressing that the lower-priced choices of Chinese electrical car (EV) makers are “catching on more strongly with buyers than those of established manufacturers.”
In the primary quarter of this yr, Chinese EV maker BYD overtook Germany’s Volkswagen as the general automotive market chief in China, with gross sales leaping 69 p.c year-on-year. For German automakers specifically, China “remains a key market,” EY famous.
In Q2, a couple of in three new vehicles bought by the three largest German carmakers (BMW, Mercedes-Benz and Volkswagen) went to China.
Volkswagen Group, Germany’s largest automotive producer, is strengthening its presence in China. The firm has just lately introduced the acquisition of a 4.99 p.c stake within the Chinese EV startup XPeng, whereas its luxurious model Audi additional expanded its cooperation with its Chinese three way partnership companion SAIC.
“Local partnerships are an important building block in the Volkswagen Group’s ‘in China for China’ strategy,” Ralf Brandstaetter, chairman and chief govt officer (CEO) of Volkswagen Group China, mentioned in July. (1 euro = 1.08 U.S. dollar)