German media: European and American automakers lag behind their Asian competitors

According to a report by Cankao Xiaoxi Net on June 8, citing a June 4 report by the German website Die Welt, German automakers are increasingly falling behind their Asian competitors. The accounting firm EY analyzed data from the top 20 global automakers in a research report. The report shows that while German automakers saw both sales and profits drop in the first quarter of this year, new competitors from China are showing steady improvements in their operations.

According to reports, the combined sales of Germany's three major automakers fell by 2.3%. Only Volkswagen saw a slight sales increase, while BMW and Mercedes-Benz experienced significant sales declines. Profits at all three companies dropped sharply, with a combined decrease of approximately one-third. A similar situation occurred among U.S. automakers, with total sales falling by 2.9% and profits declining by nearly one-third.

Asian automakers, particularly those from China, performed significantly better. Chinese automakers saw nearly a 15% increase in sales and an even more striking 66% rise in profits. Growth was particularly strong at BYD and Geely, the parent company of Volvo.

Japanese and South Korean automakers also outperformed their European and American counterparts. Overall, five of the world's six most profitable automakers are Asian. Only BMW ranks third with a 9.3% operating margin.

Established automakers led by German car companies are currently facing numerous challenges: weak economic conditions have curbed car-buying demand, while high costs and slow transitions to electric vehicles have squeezed profits. "Additionally, there is the problem of losing the Chinese market, where domestic companies are increasingly squeezing out Western automakers that once dominated," said Constantin Gall, a market analyst at Ernst & Young.

Since April, U.S. President Trump's 25% tariffs on imported vehicles have exacerbated the plight of German automakers. Gall believes the new tariffs will further depress profits. "The gap between German car companies and Chinese automakers that have no operations in the U.S. will widen further," he said.

In recent months, multiple German automakers and auto parts suppliers have announced cost-cutting plans including layoffs. But Gall argues that cost-cutting alone is insufficient to solve the problem. "Western automakers must completely reinvent themselves," he said, noting this includes resolutely advancing digital transformation and accelerating the pace of new vehicle development and decision-making.

In his view, Western automakers should learn from the new challengers from the Far East in this regard. "The success of Chinese automakers precisely shows that what matters is not just investing huge sums of money—speed of action, flexibility, and clear investment priorities are at least equally important," Gall said.