Automakers performed better than ever in 2022. This is the finding of the firm EY, which analyzed the financial results of the world’s top 16 automotive companies.
The year 2022 has been “exceptionally successful for the major automotive groups” according to the firm EY. The world’s top 16 manufacturers alone amassed nearly 1.9 trillion euros in sales last year, 18% more than the previous year. All, without exception, saw their turnover increase, with Tesla registering the strongest growth, of the order of 51%.
The year was also record in terms of profits. Automakers made a total of 157 billion euros in operating profit in 2022, a figure up 18% year on year. Only their margin is stagnating slightly. It averages 8.4% in 2022 compared to 8.5% in 2021.
Profits up, sales down
These record results come at a time when global sales are down 3%. The decline concerns the three major automotive markets: Western Europe, the United States and China. It is particularly felt in China, where sales fell by 12%. The country has been “strongly marked by the pandemic, weaker economic growth and the emergence 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 made possible by 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 EY firm. “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”.
Soon the price war?
The challenge this year will be to maintain these high prices, “in a context where inflation weighs on the purchasing power of consumers” warns EY. “The question of the price war obviously arises”, slips Aymeric de La Morandière, who nevertheless believes that the levels of profitability of car manufacturers should remain “significant” this year. “Since the covid crisis, automotive groups have worked a lot 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, profitability champion in 2022 with a 16.8% margin, has embarked on an all-out offensive on prices 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 is in last place in the ranking, with a margin of 3.5% in 2022.
“It is important for manufacturers to get out of cash now, because they have colossal investments to make to ensure their transition to electric” finally analyzes Aymeric de La Morandière, “It will not be easy, some manufacturers are more fragile than others”.
