There is no need to recall the series of events that are putting the global economy to the test. From the covid-19 pandemic to the war in Ukraine, going through the tensions between China and the United States, some things and others have led to a skyrocketing increase in the price of energy, steel, aluminum, lithium, cobalt and practically all raw materials; in shortage of semiconductors, cables and other components; And as if that were not enough, the prices of transport -essential to take things from one place to another- have also skyrocketed. Still, automakers can’t produce cars at the rate they’d like, but that hasn’t stopped them from making huge profits.
If one looks only at sales figures, one might reason that the automobile industry is going through a difficult time. And make no mistake, supply chain issues are making it very difficult. It is also uphill for customers, who are assuming much higher prices than a few months ago. But the bills come out to the manufacturers (at least to the majority), and in fact they come out bigger than ever.
Many of the big automakers are making higher profits than ever before, some even billing less. This is thanks to much higher profit margins, meaning much more expensive cars. Undoubtedly, the affected is the customers pocket. Audi, for example, has achieved the highest profitability in its history in the first half of this 2022, increasing its margin by more than 50% compared to the same period of the previous year. The Stellantis group has increased its profits by 34%, despite the fact that it has sold fewer cars. And so we can count a large group, which we will detail below, which shows the current situation. Fewer cars are sold but with a much, much higher margin, which only increases the profits of the companies. Of course, not all suffer the same fate.
Audi: 4,933 million euros
The Ingolstadt brand, belonging to the Volkswagen Group, has sold 785,099 cars in the first half of 2022, 20% less than in the first half of last year. Its revenues have grown by 700 million euros (+2.4%) but what has skyrocketed has been its profits.
Despite selling 20% fewer cars, Audi’s operating profits have grown by 58% compared to the first half of the previous year, reaching 4,933 million euros.
That is why it is not surprising that the mark of the four rings has been reached in this first semester the highest profit margin in its history: 16.5%. This figure represents an increase of 54% compared to the same period of the previous year, when Audi obtained a profit margin of 10.7%.
As is the case with virtually all manufacturers, electric sales were higher than the previous year. The German company managed to sell 50,033 electric cars, an increase of 52.7% compared to the first quarter of 2021. This leaves an electric share of 6.3% of the brand’s total sales.
BMW: 13,232 million euros
The BMW Group has sold 1,160,094 cars in the first half of 2022, which represents a decrease of 13.4% year-on-year. Of this total, 1,016,228 units correspond to BMW brand cars (-13.7%). The only brand in the group that has sold more cars than last year is Rolls-Royce (+6.8%).
The German group had a turnover of 65,912 million euros in the first six months of the year, 19.1% more than the previous year, with a net profit of 13,232 million euros, which represents an increase of 73.6% in the year-on-year comparison. Despite the fall in sales, turnover has risen due to price increases and the consolidation of the Chinese subsidiary BMW Brilliance Automotive (BBA), which has contributed 11,000 million euros to the group’s turnover.
However, its operating profit fell to 6,817 million euros (-15.1%). The operating profit margin stood at 24.5% at the group level, and 8.2% for the car division. This margin has been affected by the consolidation of the Chinese subsidiary BMW Brilliance Automotive mentioned above.
If we focus on pure electric cars, BMW sold 75,980 units globally, 110.3% more than during the same period last year.
Hyundai: 3,661 million euros
The South Korean brand is experiencing a sweet moment. Your sales are down less than average and your brand image is better than ever. Hyundai has sold 1,877,193 cars worldwide during the first half, 7.6% less than last year, of which almost 100,000 have been pure electric cars.
The company has obtained revenues of 49,910 million euros in the first half of 2022, which represents an increase of 14.9% compared to the same period of the previous year. Operating profit shot up 38.6% to reach 3,696 million euros, while net profit has increased by 38.8% to reach 3,661 million euros at the current exchange rate.
Kia: €2.19 billion
Kia, belonging to the Hyundai Motor Group, has sold 1,419,488 cars between January and June 2022. It is a slightly lower figure than last year, around 3% less specifically, but it is one of the brands that suffers the least in this regard . Hyundai sold 87,150 electric cars in the first half, more than double last year.
The firm led by Rafa Nadal around the world had revenues of 30.3 billion euros in the first half, 15.2% more than last year, with an operating profit of 2.9 billion euros (+50.3%). ). Net profit has increased by 22.3%, to 2,190 million euros. In the second quarter of the year Kia reported a profit margin of 10.2%.
Stellantis: €7.96 billion
Stellantis had revenues of 88,000 million euros in the first half of the year (+17%) and increased its operating profit by 44% to reach 12,374 million euros. The company got a net profit of 7,960 million euros, 34% more compared to the same semester of the previous year.
Once again, the highest profits have been achieved thanks to “greater operational and commercial profitability”, according to the company itself. Group-wide car sales fell 7.4% to 3.03 million units globally, but the group Stellantis achieved record profitability in the first half of 2022, with a profit margin of 14.1%. A notable increase compared to the 11.4% return obtained in the first half of 2021.
The French-Italian-American automobile group highlighted the increase in sales of electric vehicles: with a total of 136,000 units, electric sales increased by 50% compared to the first half of 2021.
Tesla: 5,450 million euros
Tesla is one of the few companies whose sales have grown considerably so far this year compared to the previous year. Tesla delivered 564,743 cars in the first half of 2022, 46.3% more than the same period of the previous year.
The company chaired by Elon Musk obtained about revenue of 34,870 million euros in the first half of 2022, an increase of 57.3% compared to the same period last year. There was a time when regulatory credits were an important part of the results accounts of the American company. Now, however, 88.2% of his income comes from car sales.
Tesla got some profits of 5,450 million euros in the first semester, 253% more than in the same period of 2021, with a 17% operating profit margin. However, Tesla’s profitability decreased to 14.6% in the second quarter of the year due to higher costs of raw materials, basic products and logistics; higher fixed costs per car in Shanghai due to factory shutdowns; the negative impact of the exchange rate (revaluation of the dollar against other currencies); and losses suffered on your investment in Bitcoin. The company has sold 75% of its position in Bitcoin at a loss.
Volkswagen: €1.86 billion
The Benefits of the Volkswagen brand increased by 54.7%going from 1,200 million euros to 1.86 billion in the first half of 2022. The brand’s return on sales soared 64.7%, from 3.4% last year to 5.6% last semester.
All this despite the fact that Volkswagen Passengers Cars (the passenger car division of the Volkswagen brand) sold 21.5% fewer cars than the same semester of last year, remaining at 1,210,000 units globally. Despite this significant year-on-year decline in sales, the company generated revenue of €33.2 billion, just 7% less than in the first half of 2021.
Once again, the positive note in sales is put by electric cars: Volkswagen sold 116,000 electric cars in the first half of the year, 25% more than the same period of the previous year (in Europe the increase was 40%). The best-selling model was the Volkswagen ID.4, with around 63,000 deliveries, almost half of all Volkswagen electrics.
At the group level, turnover increased by 2%, to 132,285 million euros. However, their net profit soared 27% compared to the first half of 2021, reaching 10,296 million euros. The operating profit of the German group amounted to 12,828 million euros, 13% more than the previous year, with an operating margin of 9.7%.
At the group level, sales of the Volkswagen Group as a whole fell 22.2% to 3,875,000 vehicles. Of that total, electric vehicles accounted for 217,000 units in the first half of the year, 27% more.
Not all earn more than before
It has become clear that many of the big manufacturers have skyrocketed their profits and profitability despite the current difficult situation. However, not all dance to the same tune. Not all carmakers have increased their profits so far this year. For example, Mercedes Benz has been 16% less net profit than in the first half of last year, obtaining 6,784 million euros of net profit in the first six months of 2022.
Toyotafor his part, has seen reduced its net profit by 17.9% in the first quarter of Japanese fiscal year 2023 (April-June). The Japanese company obtained net profits of 736,820 million yen, 5,392 million euros at current exchange rates. As far as sales are concerned, Toyota has sold 5,137,811 cars worldwide during the first half of the year, 6% less year-on-year.
Within the Volkswagen group, Skoda has increased its income by 0.2% but its profits have fallen by 30.6% compared to the first half of 2021, staying at 676 million euros. The Czech firm delivered 360,600 cars in the first half of the year, 30% less than the same period of the previous year.