Editor’s Note: This feature originated with Motor1.com European editions. As such, values on the images are listed in Euro. Where applicable in the text of the article, we’ve converted Euro to US currency.
The unprecedented challenges faced by the auto industry in 2021 led to an unprecedented financial result for most OEMs from Europe, the United States, Japan, and South Korea. This is the first and possibly the most surprising conclusion from a detailed study of the financial reports from 19 car manufacturers around the world. Fewer cars were sold than before the pandemic, but profits still increased.
According to the financial statements from Aston Martin, BMW Group, Daimler, Ferrari, Ford, Geely Group, General Motors, Honda, Hyundai Motor Group, Isuzu, Mazda, Renault-Nissan, Stellantis, Subaru, Suzuki, Tata Group, Tesla, Toyota, and Volkswagen Group, the revenue totaled $1.89 trillion. That’s an increase of 13 percent compared to 2020, but down by 6 percent compared to 2019. Interestingly, total units sold did not follow the same pattern.
In 2021, these companies sold 69.54 million vehicles, which was 2 percent more than in 2020, and 14 percent less than in 2019. This means that automakers increased prices or reduced discounts during the year. This bizarre trend of units sold versus profit is partly explained by the lack of new cars available due to the chip shortage. Fewer cars available combined with higher demand following COVID lockdowns have drive up prices.
Indeed, the average revenue per unit sold in 2021 was $27,270, up by 11 percent from 2020 and 10 percent from 2019.
Focus On The Most Profitable Segments
Further down in the financial statements, operating profits revealed another interesting fact. Despite the pandemic’s impact on global economies and subsequent supply chain issues affecting the auto industry, these 19 OEMs earned more money than in 2020 and 2019. The profits generated from the operations of the companies (total revenue minus production costs and selling/administrative expenses) amounted to $143.97 billion in 2021.
In other words, for every $100 worth of sales, these companies managed to keep $7.60 in profit.
By contrast, in 2020 that figure was only $3.60 for every $100 in sales. That likely reflects the height of the pandemic in 2020, as in 2019, the operating profit was $5.10 per $100. The increase looks also impressive when comparing the total operating profits to the total number of cars sold.
As such, looking at it from a perspective of earnings per vehicle sold, it dropped from $1,270 /car in 2019 to $892 in 2020, then skyrocketed to $2,069 last year.
Focusing on SUVs and EVs helped these OEMs to offset big losses coming from other internal combustion vehicles such as sedans. As the supply of semiconductors dwindled, they took what was available and pumped it into the most profitable vehicle lineups, keeping those assembly lines running as other less profitable models withered away.
Ferrari Is The Cash Cow Of The Industry
Among all the brands, Ferrari continues to be the most profitable automaker by far. Its operating margin increased from 21.4 percent in 2020 to 25.5 percent last year. Based on the figures, The company earned an astounding $106,078 per unit sold in 2021. In a very distant second place was Tesla, earning $6,693 per vehicle.
The author of the article, Felipe Munoz, is the Automotive Industry Specialist at JATO Dynamics.
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