In 2021, the global shortage of semiconductors seriously affected automobile production. The global car market lost about 10.2 million vehicles last year due to chip shortages, according to AutoForecast Solutions. In addition, the novel coronavirus epidemic and rising commodity prices also pose a lot of challenges. Against this unfavorable background, international mainstream automakers have still achieved record performance. In the financial reports of 14 international mainstream automobile companies sorted out by Gaishi Automobile, the revenue, operating profit and net profit of all automobile companies have increased to varying degrees.
General situation of 14 auto companies' financial reports: many auto companies achieved triple-digit profit growth, and 2 auto companies turned losses into profits
Last year, Volkswagen was severely affected by a shortage of semiconductors, resulting in about 600000 fewer cars sold in 2021 than in 2020. Despite the decline in sales, Volkswagen's revenue rose 12.3% year-on-year to $274.7 billion in 2021, thanks to a better product mix and higher pricing, taking back the top spot in revenue from Toyota; operating profit also almost doubled from 2020 (99.2% year-on-year growth) to $21.16 billion.
However, Volkswagen still lags behind Toyota in terms of profit, which remains the world's most profitable carmaker with an operating profit of $27.3 billion. In addition to being less affected by the shortage of semiconductors, Toyota has also benefited from the depreciation of the yen, which increases the value of its overseas earnings.
Mercedes-Benz ranked third in the world in 2021 in terms of revenue, thanks to its excellent product portfolio, stable net pricing, continuously improving cost efficiency and good performance of used car business, with sales of its high-end car line up 30%. Delivery of pure electric models for passenger cars and light commercial vehicles increased significantly by 64%. Since 2019, fixed costs in the Mercedes-Benz passenger car business have fallen by 16%, while bicycle turnover has increased by 26%, to an average of 49800 euros per vehicle.
Rising prices and strong sales of high-end cars have also helped BMW boost revenue, with pre-tax profits more than doubling year-on-year (207.5%), even exceeding pre-epidemic levels. Among them, the profit margin before interest and tax in the automotive division reached 10.3 per cent, the highest level since 2017, while the group's net profit also hit an all-time high, with an increase of 223.1 per cent year-on-year. So far, BMW has outperformed its competitors in dealing with chip shortages. High-end carmakers are largely in a better position to deal with supply chain problems than mainstream market brands because they can pass on some of their costs to consumers by raising vehicle prices.
Stellantis had revenue of $167.2 billion in 2021, the fourth largest in the world; adjusted operating profit almost doubled to $19.8 billion, with an operating margin of 11.8 per cent, higher than its target of about 10 per cent, as the company effectively implemented synergies and generated a net cash gain of about 3.2 billion euros. Net profit was 13.4 billion euros, nearly tripling from a year earlier, while industrial free cash flow reached 6.1 billion euros, mainly driven by strong profitability and net cash synergies.
Among US automakers, GM's operating profit rose 47 per cent year-on-year to $14.3 billion, Ford's operating profit surged 260 per cent to $10 billion and Tesla's operating profit rose from $2 billion to $6.5 billion. Although there is still a big gap in revenue and profit between Tesla and Ford GM, Morgan Stanley analyst Adam Jonas, a top analyst on Wall Street, said that in the next five years, Tesla's revenue will exceed that of General Motors and Ford combined. Although it is not yet clear, this trend should become obvious in the next 24 months, because Tesla's delivery volume is on the rise, at the same time. The cost of bicycles also continues to fall.
Among the above-mentioned car companies, Mercedes-Benz, Ford, BMW and Tesla all achieved more than triple-digit profit growth. It is also worth mentioning that Renault and Nissan both got rid of the previous loss quagmire in 2021, turned losses into profits, and even exceeded expectations. Renault's "value over quantity" strategy helped improve performance, and in 2021, Renault began a massive restructuring to reduce fixed costs and refocus on the most profitable models and markets. Nissan, on the other hand, benefited from favorable market conditions in the United States and continued improvement in sales quality in various markets, which led to a significant increase in its bicycle revenue, coupled with the company's strict control of costs and a weaker yen, Nissan's profits increased significantly compared with the same period last year.
With the increase of vehicle prices and the reduction of costs, the profits of car companies can increase.
In 2021, while global car sales stagnated, auto companies' revenues and profits grew. There are two reasons, one is that the price of vehicles has increased, and the other is that the costs of car companies have been reduced.
Due to the shortage of chips, global car production has declined and demand for cars has outstripped supply, providing carmakers with better pricing power and cars that can be sold at higher prices. at the same time, automakers usually offer fewer car subsidies to attract consumers. In addition, against a backdrop of chip shortages, carmakers use their limited supply of chips for more expensive models, which improves the price structure of their products and increases profit margins.
Double-digit price increases in some car markets and market segments are more than offset by falling car production and electrification costs on profit margins. For example, the average trading price of Stellantis vehicles in the US retail market has risen by 20 per cent, driven by higher car prices, reduced incentives and a richer product mix.
In addition, cost-cutting measures by car companies have also helped boost profits. Or take Stellantis, a group formed by the merger of the PSA Group and FCA, which generated a higher-than-expected net cash synergy of 3.2 billion euros in the first year of the merger. Tang Weishi, chief executive of Stellantis, has told analysts that the group has reduced its break-even point to less than 50 per cent of its sales. According to the European market, the balance of sales in the European car market after the pandemic was about 15 million, nearly 20 per cent lower than the 18 million before the outbreak of COVID-19.
Renault also said it could reduce its break-even point by 40% two years ahead of schedule. As part of its cost-cutting plan, Renault has cut billions of dollars in operating expenses since 2020, which is an important reason for its turnaround in 2021.
The situation in Russia and Ukraine casts a shadow over the prospects for 2022
Looking forward to this year, it remains to be seen whether the auto industry will be able to repeat the glory of 2021. Because the situation in Russia and Ukraine has brought new pressure on the supply chain of the automobile industry, and caused car companies to stop production many times.
The situation in Russia and Ukraine is likely to have a new impact on the global economy, as many countries are grappling with inflation levels not seen in decades. Allianz said it cut its forecast for (GDP) growth in the eurozone this year from 3.8 per cent to 2.6 per cent and raised the rate of price increases to 5.5 per cent from 3.8 per cent, adding that household purchasing power would be severely affected.
BMW, for example, last week cut its profit margin forecast for 2022 from 8 to 10 per cent to 7 to 9 per cent, citing the impact of the situation in Russia and Ukraine on the supply chain and the global economy. Although most carmakers have little exposure to Russia, Renault's controlling stake in Lada's parent company, AvtoVAZ, accounts for a large portion of the group's profits. The Russian government has threatened to recover the assets of companies that have withdrawn from Russia because of the situation in Russia and Ukraine, which will have a serious impact on Renault's comeback.
