The year 2022 has been “exceptionally successful for large automotive groups” according to the firm EY. The world’s top 16 manufacturers alone racked up almost €1.9 trillion in sales last year, 18% more than the previous year. All, without exception, saw their turnover increase, with Tesla registering the highest growth, of the order of 51%.
The year was also record-breaking in terms of earnings. Automakers made a total operating profit of €157 billion in 2022, a figure that was up 18% year-on-year. Only its margin is stagnating slightly. It is averaging 8.4% in 2022 compared to 8.5% in 2021.
Profits go up, sales go down
These record results come at a time when global sales are down 3%. The fall affects the three main automotive markets: Western Europe, the United States and China. It is particularly felt in China, where sales fell 12%. The country has been “strongly marked by the pandemic, lower economic growth and the appearance of new competitors,” explains EY. Only five manufacturers have seen their sales increase in 2022: Ford, Suzuki, Mercedes, Hyundai and Tesla, which takes the prize in this area.
Record results, but declining sales, the equation was possible thanks to a particular context in 2022.
“The year was marked by significant delivery difficulties and, at the same time, by strong demand, especially for high-end vehicles,” analyzes the firm EY. “Manufacturers were able to impose high prices, pricing power,” continues Aymeric de La Morandière, partner at EY and author of the study, “is the only explanation for these record results.”
Price war soon?
The challenge this year will be to keep these prices high, “in a context where inflation weighs down the purchasing power of consumers,” warns EY. “The question of the price war obviously arises”, slides Aymeric de La Morandière, who nevertheless believes that the levels of profitability of car manufacturers should remain “significant” this year. “Since the covid crisis, auto groups have worked hard on their cost structure,” he continues, before adding: “the growing share of electric and hybrid vehicles in sales is driving prices up anyway.”
Still, the price effect is already being felt. Tesla, the champion of profitability in 2022 with a margin of 16.8%, has embarked on an all-out price offensive since January, and has already seen its margin melt in the first quarter.
First on the margin podium in 2022, the Californian manufacturer is followed by Mercedes (13.6%) and Stellantis (11.7%). Nissan occupies the last place in the ranking, with a margin of 3.5% in 2022.
“It is important that manufacturers get out of cash now, because they have colossal investments to make to ensure their transition to electric”, Aymeric de La Morandière finally analyzes, “it will not be easy, some manufacturers are more fragile than others”.
Source: BFM TV
