All EU Manufacturers Emerge from a Tough 2024 with Sharp Declines in Profits

2024 concluded with traumatic results for the automotive industry. Comprising some of the most powerful companies on the planet, the industry values stability in all its aspects and unified markets, two factors that were shaken last year.

On one hand, the global trend is a reduction in purchasing power across the three major economic blocs: Europe, China, and the USA. These regions have also reinforced protectionist measures at their market borders, with community tariffs on Chinese electric cars or necessary quotas for the origin of parts to access incentives in the American case. This, with Trump's arrival at the White House and a more aware European Commission regarding the automobile's role as an economic engine, only promises to increase in the coming legislatures.

2024 was also the year of Chinese brands expanding into Europe – which explains the tariffs imposed by Brussels – whose price competitiveness has already displaced traditional manufacturers in their own country.

Of the 14 major automotive groups worldwide, only five recorded a net profit higher than in 2023 – none reported losses – and many, especially European ones, faced considerable setbacks, notably Stellantis' 70.6% drop.

However, last year also highlighted that some mainstream brands hit the mark, especially those with modern products that enjoy a good reputation and design, reasonable prices, and hybrid engines. This is the case of Toyota, which, despite selling fewer cars than in 2023, consolidated its position as the world's leading manufacturer, a position it seems set to maintain in the future.

The Japanese giant has been in the top global position among car manufacturers for years, but in 2024 it managed to widen the gap to the point where its business would have to derail significantly – something practically impossible coming from Toyota – for its volume rival, the Volkswagen Group, to catch up. Last year, the company registered 10.82 million vehicles, 3.7% less than in 2023, and recorded a turnover of 298.099 billion euros, 6.9% more. These translated into a net profit of 32.572 billion, a figure that more than doubled that of the second place, the Hyundai Group.

Besides a weak yen that favored its exports, Toyota benefited from a cautious strategy regarding electrification – although it has developed zero-emission models – and a product portfolio that covers practically all possible niches with a reputation for reliability.

Despite having a higher turnover than Toyota in 2024, the Volkswagen Group ended the year with difficult messages to digest, such as the agreement to eliminate 35,000 jobs and reduce its production capacity by more than 700,000 vehicles in Germany. Its net profit plummeted by 30.6%, closing the year with 12.394 billion. In total, they sold over 9 million vehicles.

Volume brands are one of the pillars on which the German consortium, Europe's largest car manufacturer, is based. And within its 'Core' division, one of the standout brands is Skoda, which achieved historic results, with 926,600 deliveries to its customers (+6.9%) and reaching its production record: 1.02 million units. The operating margin was considerably higher than that of the parent company, at 8.3% – almost two percentage points above – and a turnover of 27.787 billion (+4.7%).

In China, goods symbolizing status are highly valued, and German car brands, especially Porsche, Mercedes-Benz, and BMW, have been objects of desire in the world's largest unified market.

However, all these suffered a severe blow in 2024 when Chinese brands caused their market share to drop significantly in the country. "The perception of our brand has changed," stated Porsche CEO Oliver Blume during the brand's results presentation. The luxury sports car manufacturer closed the year with a net profit of 3.595 billion, 30.3% less.

Similar declines were reported by its rivals: Mercedes-Benz ended the year with 10.207 billion euros, 28.4% less than in 2023, while its main rival, BMW, fell by 35.4%, to 7.290 billion euros. The latter's business in the Asian country plummeted by 13.4%, to 715,000 units, nearly a third of its total sales.

Another major success of 2024 was recorded by the Hyundai Group, which includes its namesake, Kia, and Genesis. The Korean consortium was one of the most profitable, achieving the second-largest net profit among all manufacturers – 15.295 billion euros, 9.4% more – with a turnover of 187.808 billion (+7.7%), placing it in third position by turnover. In terms of volume, they sold 7.14 million vehicles, slightly below the 2023 figures.

Although they present their results differently, Hyundai and Kia enjoyed, similar to Toyota, a wide range that covers almost all market niches, with different propulsion options.

Europe's second-largest group – selling 5.5 million vehicles, 980,000 of which came from its Spanish plants in Vigo, Madrid, and Zaragoza – found itself in turbulent waters in 2024 after a significant confrontation with the United Auto Workers union in the USA, a market where its Jeep and Ram brands have suffered from weak demand. After issuing several warnings of negative results, the group's shareholders put such pressure on the board that it culminated in the departure of its CEO, Carlos Tavares, who had held the position since the group's founding in 2021. The Portuguese executive, known for his cost-saving policies, had set the goal of achieving synergies among the group's 14 brands.

Stellantis achieved a turnover of 156.900 billion, a 17% drop, and these translated into the second-largest decline in net profit, closing the year with 5.473 billion.

The other French group also recorded a huge drop in its operating profit, almost two-thirds below what it achieved in 2023, with 752 million in 2024. The turnover rose to 56.232 billion, 7.4% more, with 2.2 million sales (+1.3%). Part of the impact on Renault's results is due to the remnants of the Renault-Nissan-Mitsubishi Alliance, in which the French group controls 35.7% of the Japanese company. Last year was particularly tough on Nissan, and the loss of value of its shares, along with a divestment of about 2 billion, negatively affected Renault, which would have closed the year with a profit of 2.762 billion.

The turbulent situation with Nissan led the Japanese company to consider a merger with Honda to create the second-largest manufacturer in its country, with combined sales of a respectable 7 million units – part of which would correspond to Honda's motorcycles. Nissan closed the year with the largest drop (75.4%) in results, with a profit of 668 million, while Honda achieved a net profit of 6.499 billion (+11.2%), with a turnover of 135.618 billion, 12.3% more.