Many car manufacturers like Mercedes are making profits. However, consulting experts warn of risks. The situation in China is worrying. Car sales there are no longer running smoothly.

According to the consulting company EY, the situation in the automotive industry is less rosy than the key figures from manufacturers suggest.

The sale of new cars in China is coming under pressure because of the corona lockdowns there. This was reported by EY (Ernst

China is the largest single market for the three German groups. “An end to the rigorous corona policy of the Chinese authorities is not yet in sight, so there is a risk of further sales declines in the coming months,” warned EY industry consultant Peter Fuss. According to Chinese industry data, sales of cars to consumers fell by 35.7 percent in April compared to the same month last year.

Selling fewer cars, earning more

On average, major manufacturers sold fewer cars worldwide from January to the end of March compared to the same period last year. But companies usually earned better, as the study showed. In terms of return on sales, which compares sales and operating profit, the US electric car manufacturer Tesla was clearly ahead at 19.2 percent. In the ranking of the industry giants, Mercedes-Benz follows with 15 percent, Volkswagen with 13.3 percent and BMW with 10.9 percent.

“The bare figures for the first quarter are excellent, but the actual situation in the auto industry is extremely tense,” summed up the head of the Western Europe mobility division at EY, Constantin Gall. Above all, manufacturers of luxury vehicles benefit from an exceptional situation: In view of the lack of chips, semiconductors are installed primarily in large and expensive cars. At the same time, there are hardly any price reductions, as demand is high. However, the profit boom will pass some companies by, said Gall.