German car manufacturers report lowest quarterly profit since 2009

STUTTGART - German car manufacturers faced pressure not seen since the financial crisis in the quarter from July to September, reported German news agency dpa. 

While sales and revenue for Volkswagen, BMW and Mercedes-Benz remained largely stable, earnings before interest and taxes (EBIT) of the manufacturers plummeted by nearly 76 per cent. 

Together, they reached just over €1.7 billion (US$2 billion), the lowest value since the third quarter of 2009, according to an analysis by the auditing and consulting firm EY released earlier this week.

No other major car-producing country performed as weakly as Germany in terms of revenue and profit growth, according to the report. 

However, the industry as a whole is also in a profitability crisis. 

The world's 19 largest car companies, whose financial figures EY expanded, slightly increased their revenue in the third quarter to around €531 billion.

But profit before interest and taxes shrank by 37 per cent to around €18.9 billion. This is the lowest value since 2018.

EY automotive expert Constantin Gall said: "The global automotive industry is in a deep crisis; However, it is currently the German car companies that are suffering particularly badly." 

He attributed this to the general weakness of the premium segment, US tariff policies, negative exchange rate effects, high investments in electric cars that have not yet paid off and high expenses for restructuring the companies. 

"All this is currently creating a perfect storm, especially for the German car manufacturers," he said.

The upheaval is particularly noticeable in the world's largest car market, China, where sales of German manufacturers fell by 9 per cent in the third quarter. - BERNAMA-dpa