Study: The global auto industry recorded record profits in the first half of 2021

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Posted on: Tuesday, August 31, 2021 – 10:38 AM | Last update: Tuesday, August 31, 2021 – 10:38 am

A recent study showed that the global auto industry made more money in terms of operating profit in the first half of this year than at any time in the industry’s history..

According to a survey conducted by the economic consultancy “Ernst & Young”, the 16 largest car companies in the world achieved a record level of operating profit of 5.71 billion euros during the period from January to the end of last June.

In the previous year, companies incurred a total loss of 1.4 billion euros in the same period, according to the results of the study, the results of which were published on Tuesday.

At that time, with the onset of the Corona crisis, global supply chains and demand collapsed.

Remarkably in the study, most companies reported significant operating profits, even though global auto sales and corporate revenues were, on average, below the pre-corona level.

In the first half of the year, only 5.33 million vehicles were sold, 11% less than in the first half of 2019.

The revenues of the 16 largest car companies were also about 2% less than the comparable value for 2019 at 809 billion euros.

The sector expert at Ernst & Young, Peter Voss, said that companies benefited mainly from the austerity measures that began during the Corona crisis and from the trend towards buying expensive and large models.

Furthermore, he added, the current global shortage of chips combined with rising demand for cars has created a favorable price environment.

“The lack of chips means that car companies are focusing on high-margin cars and relying less on giving high discounts to stimulate business. Right now, demand is greater than supply – so the sector has been able to take advantage of this situation,” he said.

When looking at margins, German car manufacturers BMW and Daimler come out on top, as the study showed that operating return on sales – in other words the remainder of sales as profit from operating business – was 5.14% higher at BMW. Compared to all other large car companies, Daimler is in second place (9.12%), and Volkswagen Group is in sixth place (8.8%).

It should be noted that return on sales is a measure of the profitability of the company’s business. The figures include not only the purely automotive business, but also all other activities of the 16 companies surveyed.

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