Global auto industry sees significant profit growth

On Tuesday, its financial report for the second quarter presented the last major automotive concern – Toyota. The Japanese company again outpaced all competitors in terms of sales, and also reported a record quarterly profit. The Japanese manufacturer’s report was the final touch to the overall picture of the recovery of the global auto industry, which seems to have finally recovered from the effects of the COVID-19 pandemic.

The profit of the Japanese automaker Toyota Motor in the first quarter of fiscal year 2024 (April-June 2023) amounted to 1.3 trillion yen ($9 billion). This is not only 75% more than last year, but also a new quarterly record for the company.

As noted in the Toyota report (.pdf), the company managed to significantly increase sales in all regions thanks to the increase in production rates and overcoming the shortage of semiconductors, which has been observed in the market since autumn 2020. True, the company notes, some customers still have to wait for the delivery of the purchased car. But the Japanese manufacturer intends to deal with this in the near future.

“We have faced many challenges, including due to COVID-19 and manufacturing issues due to limited supply of semiconductors, but the results reflect the efforts of each of our employees … and that the established management and profit structure has proven to be resilient to crises,”— according to the Toyota report. Over the past quarter, the Japanese company managed to sell 2.3 million vehicles, 34.2% of which are electric (including hybrid cars). The company sold 2 million vehicles a year earlier. And for the first half of 2023 – 5.42 million rubles.

This allowed the Japanese company to once again become the world leader in sales, leaving behind its main competitor, the Volkswagen Group.

The German automaker sold 4.37 million cars in the first half of the year, which is 12.8% more than in the same period last year. However, despite an 18.2% increase in revenue to €156 billion, VW became the only major global automaker to report a drop in net profit by 3.1%, and by the end of the first half of the year – by 20%, to €8.5 billion.

VW’s problems are primarily related to the loss of the Chinese market, the largest in the world, in which the German concern has long occupied a leading position.

With the gradual transition of the automotive industry to electric vehicles, the share of VW in China began to decline rapidly. This market is now dominated by BYD and Tesla, whose cars are in the top six best-selling lists in the first half of 2023. Lavida from VW is only seventh, and its sales fell by 12% compared to the previous year, follows from data Marklines.

The German manufacturer is trying to rectify the situation by announcing a cooperation with local Xpeng in the production of electric vehicles. But their first joint product will not hit the market until 2026.

Other European manufacturers are doing much better. For example, Renault Group set its own half-year profit record of €2.1 billion, while the group’s revenue grew by 27.3% to €26.8 billion.

The French concern managed to achieve this primarily due to the growth in sales of the title brand (by 12% compared to the first half of 2022), which now ranks second in terms of the number of cars sold in Europe – more than 500 thousand units.

Stellantis reported revenue growth of 12% to €98.4 billion due to an increase in the number of cars sold and their prices. And the concern’s profit for the first half of the year reached €10.9 billion, which is immediately 37% higher than a year earlier.

Luxury manufacturers also report on the growth of sales and revenue – mercedes benz, BMW Group, Aston Martin And Porsche.

Finally, the US auto market is recovering much faster than analysts expected. In the first half of the year, about 7.7 million cars were sold here, which is 13% more than in 2022. And because American manufacturers also report on the growth of revenue and profits. Yes, General Motors. statedthat its revenue for the first half of the year grew by 18%, and net profit – by 7%. Similar figures for Ford Motor (.pdf) grew by 16% and 6%, respectively.

Kirill Sarkhanyants