German carmakers had their worst quarter since the days of the 2009 global financial crisis, according to a study released Monday by financial consultancy EY.
Overall, the earnings before interest and tax (EBIT) of Germany’s biggest automakers, Volkswagen, BMW and Mercedes-Benz, fell by about 76% in the quarter between July and September.
Statistics show that although sales and revenues have remained stable, production and running a business have become much more expensive, and carmakers are making less from sales.
The study showed that earnings between July and September were €1.7 billion ($2 billion), the lowest since the third quarter of 2009.
The average EBIT of the world’s 19 largest carmakers in the study fell 37% to around €18.9 billion – the lowest since 2018.
EBIT is a measure showing a company’s profit from core operations, and does not include the effects on the bottom line from financing and taxes.
The EY report cites Germany as the worst performing car manufacturing country in the analysis in terms of profits and revenues.
The global auto industry has been in the midst of a profitability crisis for some time, with EY noting that weak markets, high tariffs, unfavorable exchange rates and large EV and restructuring investments have all contributed to dragging it down.
EY automotive expert Constantin Gal said: “The global automotive industry is in deep crisis. However, German car companies are currently particularly badly affected.”
Germany’s auto industry is a major pillar of the country’s economy.
EY described the automobile market as extremely competitive and said that the weak economy has impacted sales of premium segment cars, although sales of electric vehicles are continuing to grow.