German carmakers fall behind the competition

In terms of sales development, only Stellantis fared worse. The Opel parent company recorded a drop of 17 percent. VW still generated a slight increase in turnover in 2024, while BWM and Mercedes-Benz did less business, the analysis showed. Overall, their revenue fell by 2.8 percent.

By comparison, the turnover of all companies analyzed increased by 1.6 percent in 2024, surpassing the two trillion euro mark. With revenue of almost 613 billion euros, the German trio still accounted for around 30 percent. However, their share of total sales fell compared to the previous year.

VW, BMW and Mercedes also lagged well behind the majority of other groups in terms of operating profit. Japanese manufacturers and US carmakers in particular performed better than the German companies.

EY expert: The wind has changed

According to EY market observer Constantin Gall, things are not going well for German manufacturers: "Sales are weak, the high investments in electromobility are not paying off because demand is nowhere near as strong as hoped." According to him, there are also home-made problems such as expensive software failures, restructuring costs and recalls.

In 2023, premium manufacturers in particular were still able to push through high prices, explained Gall. But the wind has changed. The economic situation and global conflicts have caused demand to drop significantly. Competition is increasingly based on price again. In addition, Asian manufacturers in particular are causing the Germans increasing concern with their innovative and at the same time inexpensive vehicles.

Crisis in the car industry

The automotive industry is in crisis due to the weak economy and is suffering from lower demand, particularly for electric cars. Several manufacturers and suppliers have already announced cost-cutting programs with job cuts in recent months.

The trade dispute with the United States is likely to intensify significantly: Last week, US President Donald Trump made good on his threats and announced additional tariffs of 25 percent on all car imports for the beginning of April. This comes at an inopportune time, especially for manufacturers from Germany. According to the latest figures from the Federal Statistical Office, the USA is their most important export market. No other country took as many new cars from Germany as the United States.

Gall: "You can't save yourself healthy"

Gall does not expect a positive turnaround this year - neither in terms of sales nor turnover and profits: "In Europe, the economy is sluggish, in the USA the tariffs that have now been introduced are likely to result in a considerable drop in sales and in China there is fierce cut-throat competition, which is being fought out strongly on price". Companies must now do their homework. There is no way around a strategic realignment and a focus on the brand core. Austerity measures can only be a means to an end in order to finance one's own transformation "You can't save yourself healthy," said Gall.