World's Largest Automakers, July 2017

[Ahmed]

The Renault-Nissan Alliance continues its strong showing that made it the world's largest automaker by half time 2017. As of July, and according to data provided by the automakers, the Alliance remains in the number one position, before Toyota, and last year's number one Volkswagen.

The Alliance, which consist of Renault including Avtovaz, Nissan, and Mitsubishi, increased its global year-to-date output by a respectable 13%. Toyota took its foot off the brake and accelerated by 4.4% compared to the same period in 2016. Volkswagen Group added 1.3%.

All three global automaker groups are expected to make and sell more than 10 million units this year. Who will come out ahead is still anybody's guess. As of July, the Renault-Nissan Alliance leads Toyota by a little less than 50,000 units. Toyota is some 136,000 units ahead of Volkswagen. Anything can happen with that tight a race.


Note: This analysis attempts to track production, not sales, because this is how the world automaker umbrella organization OICA ranks automakers.

https://www.forbes.com/sites/bertel...2017-renault-nissan-still-ahead/#7b4d12af3f31
-----------------------------------

Top 10 Automakers For June 2017: Volkswagen Reigns And Notion Of 'Peak Car' Takes A Hit

https://www.forbes.com/sites/bertel...utomakers-july-2017-no-peak-car/#582ff70115e5

Sponsored

 

[Ahmed]

New Post 9 months ago 7,579 views
World's Largest Automakers: Alliance And Toyota Neck-And-Neck, Volkswagen 3rd

 

[Ahmed]

Big carmakers, big profits?

More cars may be coming off VW's assembly line than any other, but it doesn't mean they are cheaper to build. A study proves that flexibility is key to big profits, something the Americans seem to have figured out.

In theory it's simple: The biggest companies must also be the most profitable, because with size comes perks. More units produced through economies of scale mean lower unit costs.

But in practice it's different. This is made evidently clear by taking a look at a new comparison of profits per vehicle among automakers in the first half of the year.

"Our investigation has shown that the weak - or the allegedly weak - companies can completely outdo the bigger companies in terms of profitability - and therefore future viability," said Ferdinand Dudenhöffer, director of the Center for Automotive Research at the University of Duisburg-Essen, which put together the comparison.

"This is simply because more laws apply in the auto industry than just this drive to be big," he told DW.

America's secret ingredient

Ford Motor Company came in as the most successful high-volume carmaker, both when measured in absolute profit and profit margin per vehicle. The Michigan-based company brought in 1,652 euros ($1863) with each new car sold, equaling a profit margin (measured in EBIT - earnings before interest and tax) of 8.7 percent. General Motors finished right behind Ford with a margin of 8.6 percent.

In light of the not-so-distant torments in the US automotive industry - General Motors filed for bankruptcy in 2009 - the Americans weren't even expected by the experts to be top of the list. "It was a big surprise for us," Dudenhöffer said.

Dudenhöffer sees an important factor hiding the results: flexibility. "The flexibility of a carmaker is very important," he said. "It allows for the utilization of capacities that are highly mechanized and therefore create high capital costs."

Volkswagen's structural problem

Meanwhile Volkswagen has been stuck on the same track, he noted. Though its brands have sold the most cars worldwide, the Wolfsburg-based carmaker booked the lowest profit margin (4.5 percent) among high-volume manufacturers.

"VW has had a structural problem for years," Dudenhöffer said. On the one side, he noted, the German state of Lower Saxony holds 20 percent of its shares. On the other, Mitbestimmung - in which workers participate in managerial decisions - plays an important role in the company's decision-making process, placing a dogmatic value on job safety.

"Today VW is building its own seats, its own axels and other components at Germany's high wage rate. These jobs are protected, which is good in the short term, though it adversely affects VW's profitability," Dudenhöffer said.

The profits aren't only lean in Germany though. South Korea's Hyundai-Kia brings in 755 euros ($852) per vehicle, even less than VW, which made an average of 801 euros ($903).

Though Toyota's profit per vehicle was exactly twice that, its downward trend is also concerning. "It looks as if the strengths of the Japanese companies - not just Toyota, but also Honda, Mitsubishi and Suzuki - are today no longer as pronounced as they were in the past," Duddenhöffer said.

Premium profits

In comparison, premium brands are in another league. BMW (9.5-percent profit margin) and Mercedes (7.9 percent) made off quite well so far in 2016. And luxury brands are on another planet, due of course to their astronomical prices. Ferrari sold its sports cars for an average of 310,250 euros ($349,868).

With an 18-percent profit margin and 56,000 euros in earnings per car, Ferrari was clearly at the top of the high-end market. Porsche, whose cars are a relative "bargain," was much farther down, with earnings of 15,641 euros ($17,638) per vehicle. Its margin was comparable though, at 16.7 percent. And it can still make a quicker buck than its mother company VW, which has to sell 40 new vehicles to earn what Porsche earns with one.

Big carmakers, big profits?

Sponsored