Third consecutive decline for German carmakers

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While the global car industry posts a record first half, business at the three German groups has declined for the third consecutive first half. IG Metall has called on employees at manufacturers and suppliers to join a nationwide day of action on 21 September, demanding investment rather than shareholder payouts.

Related:German Chamber of Commerce and Industry (DIHK) survey: Chinese competition affects firms without exports  /  ifo index climbs to 86.6: Germany remains a business location risk

What is EY’s automotive financial review? Consultancy EY analyses the financial statements of the 19 automotive groups with the highest revenue each quarter. The publication dated 20 September 2026 covers the first half of the year.

EY paints a mixed picture of the car industry

EY’s Constantin Gall describes a profitability crisis. He says German manufacturers are losing market share and, above all, earning power.

The gap within the industry is substantial. Combined revenue across all groups rose to almost 1,050 billion euros, a first-half record. Revenue at Volkswagen, Mercedes-Benz and BMW, however, fell to around 284 billion euros, their third consecutive first-half revenue decline.

Fifteen of the nineteen groups increased revenue, led by Tesla, Suzuki and Geely. Volkswagen, Mercedes-Benz and BMW sit at the bottom of the ranking, in 16th, 17th and 19th place. The following table compares the key figures for both sides.

German groups’ margins fall below the long-term average

The industry and the German trio also diverge on operating profit. Industry-wide profit rose by more than a tenth, helped by US manufacturers, whose operating profit increased by around a third. Operating profit measures earnings from the core business before interest and taxes.

The three German groups, however, lost almost a fifth of their operating profit. This is their weakest first-half result since 2020, which EY sees as evidence of declining earning power. The margin expresses this result as a share of revenue, showing how much profit remains from each euro of sales.

The industry’s margin rose slightly. The German groups remain above it but lost nine-tenths of a percentage point within a year. The industry’s ten-year average is 5.9 percent, meaning the German groups are earning markedly less than was typical over that period.

The gap to the most profitable competitors is wide. Toyota operates at a margin of 6.3 percent, compared with just 3.8 percent at Volkswagen.

German manufacturers’ sales in China plunge by a quarter

The three German groups sold 25 percent fewer vehicles in China in the first half than a year earlier. This decline far exceeds the fall in their overall business. Gall therefore calls the market the German groups’ single biggest risk.

China now accounts for just 23.5 percent of the three groups’ global vehicle sales. In 2020, the share was 39.4 percent, showing how much the market’s importance to the German groups has declined.

Chinese competition increases price pressure in Europe

Chinese automotive groups’ global vehicle sales fell by eight percent, but their sales in Europe rose by 44 percent. Europe is the German manufacturers’ home market.

BYD increased its European vehicle sales by 168 percent. Meanwhile, operating profit at the Chinese groups fell by 22 percent. Gall says expansion and price competition are costing these manufacturers money, yet they persist, increasing price pressure in Europe.

Gall sees Germany’s production base as a burden

Gall sees the high share of production based in Germany as an increasing burden, citing productivity relative to labour costs, energy prices and regulatory costs. In his view, job cuts, relocations and sales of entire factories will therefore remain on the agenda.

heise and Handelsblatt report job cuts at the three manufacturers and suppliers including Bosch, ZF Friedrichshafen and Mahle.

“We have not yet reached the bottom; the crisis continues.”

Constantin Gall of EY, 20 September 2026

IG Metall has called for nationwide protests

IG Metall has announced a nationwide day of action for 21 September under the slogan “A future instead of sweeping cuts”. The union had registered over 280 actions across around 100 local branches. It says tens of thousands of employees from manufacturers and suppliers are taking part.

The union is calling on employers to develop products for the future and invest rather than distribute profits to shareholders. It also demands a 35-hour working week. From policymakers, it wants trade protection and local content requirements, meaning binding commitments to create value locally.

heise quotes Hildegard Müller from a guest article in Handelsblatt. The president of the German Association of the Automotive Industry writes that production in Germany is “not a law of nature” and keeping factories busy is “not guaranteed”.

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Image Source: AI-generated (September 2026)

Translated from the German original using artificial intelligence. The German version is authoritative.