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Overtaking Maneuver Asia's Car Manufacturers Speed Past German Competition

Source: dpa | Translated by AI 2 min Reading Time

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German car manufacturers are increasingly falling behind the competition from Asia, as revealed by an analysis commissioned by EY.

This view of an overtaking BYD from China is more of a thing of the past. Asians have already outpaced German car manufacturers in terms of revenue and profit. Here's a status report...(Image: BYD)
This view of an overtaking BYD from China is more of a thing of the past. Asians have already outpaced German car manufacturers in terms of revenue and profit. Here's a status report...
(Image: BYD)

An analysis by the auditing and consulting firm EY, which evaluated the figures of the 20 leading global manufacturers, reveals that Asian car manufacturers are increasingly outpacing German players. While German companies suffered declines in sales and profits in the first quarter of this year, new competitors from China, in particular, gained significant ground, as it goes on. The combined sales of the three most important German carmakers decreased by 2.3 percent. Only VW still managed a slight increase. However, BMW and Mercedes dropped significantly. Profits fell for all thre— by a total of about 33 percent, according to the analysis. The situation was similar for US manufacturers, who lost 2.9 percent in sales and almost one-third in profits.

A Substantial Increase for China's Car Manufacturers

Things went significantly better in Asia, especially in China. Manufacturers from the People's Republic saw sales increase by nearly 15 percent and profits even by 66 percent. In China, BYD and Volvo's parent company Geely were particularly dominant. But manufacturers from Japan and South Korea also performed better than the Europeans and Americans, according to the results. In the end, five of the six most profitable carmakers in the world came from Asia. Only BMW managed to climb to third place with a sales margin of 9.3 percent.

German Car Industry on the Brink of the Abyss

According to EY market observer Constantin Gall, a turnaround is not in sight. On the contrary! The current crisis is likely to worsen over the course of the year. "The automotive industry currently has to fight on many fronts, with US tariffs adding to the mix. For some established manufacturers, the entire business model is at stake," emphasizes the EY expert. If profits continue to fall, some manufacturers will face existential questions. The competitive pressure in the automotive industry can only be described as brutal. Gall expects losses in the billions due to tariffs alone. Cost-cutting programs and job cuts are already in place, but that alone will not solve the problem. Gall recommends a faster pace in vehicle development, quicker decisions regarding market changes, and a consistent digitalization of the industry. However, this requires almost reinventing oneself. One should indeed take China as a model. They first learned from the West, and now the West should learn from the East.

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