STUTTGART (dpa-AFX) - According to an analysis, the world's largest car manufacturers achieved record sales and profits last year. However, there were signs of a slowdown in the industry in the final quarter, according to the study by the auditing and consulting firm EY. For the current analysis, EY evaluated the key financial figures of the 16 largest automotive groups.

Thanks to high new car prices and a seven percent increase in sales, the groups achieved a total turnover of just over two trillion euros - 13.7 percent more than in 2022. Earnings before interest and taxes (EBIT) climbed by a good 15 percent and reached around 176 billion euros. However, an important reason for the growth was a special effect: the weak yen helped Japanese car companies to increase profits by around two thirds and turnover by 22%. The rest of the market was less dynamic: German manufacturers recorded a combined profit growth of seven percent, while US companies saw their earnings fall by almost 30 percent.

Profitability increased slightly: the average EBIT margin, which expresses the ratio of operating profit to turnover, was 8.6 percent. It thus remained at a level of more than eight percent for the third year in a row. In comparison: in the five years before the outbreak of the coronavirus pandemic, the profit margin averaged 5.5 percent.

Mercedes-Benz is the most profitable car manufacturer

Mercedes-Benz was the most profitable car manufacturer last year with a profit margin of 12.8 percent. The Stuttgart-based company leads the rankings ahead of Opel parent company Stellantis (12.1 percent) and BMW (11.9 percent). In contrast to second and third place, however, the Stuttgart-based company's margin fell compared to the previous year. However, Tesla recorded the sharpest decline in 2023: the electric car manufacturer's margin fell from 16.8% to 9.2% compared to the previous year, placing the company in the middle of the field. The Volkswagen Group landed in tenth place. Bringing up the rear was the US car manufacturer Ford.

In the fourth quarter, however, the picture clouded over compared to the year as a whole: Sales rose by a below-average nine percent, while profits shrank by five percent. EY market observer Constantin Gall said: "Last year, the industry was still able to benefit from high new car prices and the restored ability to deliver. However, the problems facing the industry have also become increasingly clear".

EY expert sees industry confronted with several problems

Gall identified the weakening economy as one of the industry's problems. New car sales are well below pre-coronavirus levels: last year, manufacturers sold around 66 million cars, compared to just under 76 million vehicles in 2019. The result: "Overcapacity is currently a real problem for manufacturers, but also for suppliers. And there is currently no sign of an economic upturn that could lead to a real surge in demand," said Gall.

The faltering ramp-up of e-mobility is also having a negative impact on business: "Billions have been invested in the belief that demand for electric cars will increase rapidly, and now doubts are growing

- growing in politics, in the industry and among customers," said Gall. The

current billions in profits are almost exclusively due to combustion models. It will be a long time before the industry earns any real money with electric cars.

In addition, sales in China are faltering: with the exception of Volkswagen and BMW, all manufacturers surveyed sold fewer cars on the Chinese market in 2023. On average, sales there shrank by 5.4 percent. Chinese electric car manufacturers are also increasingly attacking established manufacturers in their home markets, said Gall. This challenge will become even greater in the coming years.

Dudenhoffer: Car manufacturers and dealers are courting buyers

The overcapacity in the industry could also become an advantage for consumers: According to EY, more and more manufacturers are trying to lure customers back into car dealerships with price reductions, favorable financing offers and special models. "Competition is once again very much based on price," said Gall.

Car expert Ferdinand Dudenhoffer has also observed this. There are currently good offers, but mainly for combustion engines, said Dudenhoffer. On average, internet brokers offered a 16.9 percent discount on these models on the German market in April. This is significantly more than last year, when there were still supply bottlenecks. In contrast, there was only a 12.6 percent discount on comparable e-models.

According to Dudenhoffer, increases of one to two percentage points are still conceivable for combustion engines. "But the trees won't grow into the sky. Car manufacturers and dealers are courting car buyers - but not at any price." For the study, the expert determined the discounts that independent new car brokers offer on selected models online. The study examined 15 combustion and 15 electric models from eleven manufacturers./jwe/DP/zb