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Profit margin of 11.3 percent: BMW is one of the three most profitable carmakers

Photo: ATHIT PERAWONGMETHA / REUTERS

The world's largest car companies posted record profits in the third quarter despite the weak economic situation and an intensifying price war. "The turnover of the top 16 car manufacturers climbed by 11 percent to a good 504 billion euros, reaching a new high," the consulting firm EY said on Thursday. "Total profit even rose by 35 percent to just under 39 billion euros – also a new record."

One reason for this, however, is the weakness of the Japanese currency, the yen: Japan's manufacturers therefore posted a massive increase in profits of 103 percent. In Germany, the increase is still 7 percent, while in the USA the profit of manufacturers fell by 18 percent.

According to EY, two German companies are among the three most profitable companies: Mercedes-Benz reported the highest profit margin at 13.0 percent, followed by Toyota (12.6 percent) and BMW (11.3 percent). Stellantis and Renault did not release third-quarter earnings figures.

Biggest Loser: Tesla

compared to the same period of the previous year, the average margin even climbed from 7.2 to 8.6 percent. The majority of companies were able to increase their profitability – Tesla, on the other hand, recorded the sharpest decline: The electric car group achieved a margin of 7.6 percent – after 17.2 percent in the previous year.

EY expert Constantin Gall described the good results as "records from the past". The coming year is likely to be much more difficult. "Demand for new cars is weakening, the ramp-up of electric mobility is faltering, and price pressure is increasing," he explained. Gall is already seeing more and more discount campaigns. "In the battle for better capacity utilization and market share, more and more companies are resorting to the well-known means – but these often come at the expense of margins," Gall added.

Even Mercedes boss Ola Källenius (54), who wanted to upgrade the carmaker to a luxury brand, is now only getting rid of electric models with discounts, while combustion engines have to be given an expensive boost. At Volkswagen, the demand for new electric cars is now so low that the company is cutting shifts and jobs and finding little to no buyers for used cars.

The market in China remains particularly difficult. "Domestic manufacturers are gaining market share, and a price war is raging, which can lead to a brutal selection process," says Gall. However, China remains a key market for German carmakers: In the third quarter, China's share of global new car sales of the three German car companies was 36 percent.

dri/AFP