Editor’s Note: This feature is from the European edition of Motor1.com. Thus, the values in the images are listed in Euros. Where applicable in the text of the article, we have converted Euros to US currency.
The unprecedented challenges faced by the auto industry in 2021 resulted in unprecedented financial results for most OEMs from Europe, the United States, Japan and South Korea. This is the first and perhaps the most surprising conclusion from a detailed study of the financial statements of 19 car manufacturers around the world. Fewer cars were sold than before the pandemic, but profits are still rising.
According to the financial statements of 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 income reached $1.89 trillion. That’s an increase of 13 percent compared to 2020, but down 6 percent compared to 2019. Interestingly, the total units sold do not follow the same pattern.
In 2021, these companies sold 69.54 million vehicles, up 2 percent from 2020, and 14 percent lower than in 2019. This means automakers are raising prices or reducing discounts throughout the year. This odd trend of units sold versus profit is partly explained by the lack of new cars available due to a shortage of chips. Fewer cars available combined with higher demand after the COVID lockdown has pushed up prices.
Indeed, median revenue per unit sold in 2021 was $27,270, up 11 percent from 2020 and 10 percent from 2019.
Focus on the Most Profitable Segment
Further down in the financial statements, operating income reveals another interesting fact. Despite the impact of the pandemic on the global economy and subsequent supply chain issues affecting the auto industry, these 19 OEMs are making more money than 2020 and 2019. The profit generated from the company’s operations (total revenue minus production costs and selling/administrative expenses) was $143.97 billion in 2021.
In other words, for every $100 sold, these companies managed to maintain a $7.60 profit.
In contrast, in 2020 that figure is only $3.60 for every $100 sold. That likely reflects the peak of the pandemic in 2020, as in 2019, operating profit was $5.10 per $100. The increase is also impressive when comparing the total operating profit with the total number of cars sold.
Thus, from a revenue perspective per vehicle sold, it fell from $1,270/car in 2019 to $892 in 2020, then skyrocketed to $2,069 last year.
Focusing on SUVs and EVs helps these OEMs to offset the heavy losses that come from other internal combustion vehicles such as sedans. When the supply of semiconductors dwindles, they take what’s available and pump it into the most profitable lineup of vehicles, keeping that assembly line running while other less profitable models disappear.
Ferrari Is The Industrial Money Cow
Among all the brands, by far Ferrari continues to be the most profitable car manufacturer. Operating margin increased from 21.4% in 2020 to 25.5% last year. Based on those figures, the Company earned $106,078 per unit sold in 2021. In a very distant second place was Tesla, making $6,693 per vehicle.
The article’s author, Felipe Munoz, is an Automotive Industry Specialist at JATO dynamics.