For the first half of 2022, car manufacturers announce record financial results. Even though new car sales in Europe fell by 14% (-12% globally), car brands are smiling. And in vain! All indicators are green.
At Stellantis, we recorded a turnover of 88 billion euros in the first half of the year, 17% more than in the same period a year earlier. Operating profit increased by 44% by a double-digit margin in almost all global markets.
From the Renault group, optimism is also in the order of things. Turnover remained stable at approximately EUR 21.1 billion (+0.3%), despite a 16% decline in sales. Operating margin increased by 2.6 points for the year. The manufacturer reported an operating margin of 4.7% excluding Russia, and net income from continuing operations was 657 million euros for the half year. This is due to the sale of more expensive and better equipped vehicles at lower discounts. Especially in the profitable segment C (Arkana, Austral, Mégane). ” From an operational point of view (apart from the exit from Russia, which negatively affects the group’s accounts), these are the best results in the last ten years, this is a turning point in Renault’s recent history. we explain on the Boulogne Billancourt side.
French manufacturers are not the only ones. Volkswagen increased profit by 5.7% in the first half. The same euphoria in the USA. Ford announces 19% revenue growth.
The end of the semiconductor crisis
Will the shortage of semiconductors soon become a thing of the past? The situation is improving. Many manufacturers are claiming a return to normal by the end of 2023. Thomas Schäfer, Volkswagen Brand President, wants to be more optimistic and announces: for the second half of the year (…) improvement in the supply situation. »
To improve production and delivery times. Because if Renault claims to be able to deliver the Arkana in thirty days today, the average waiting time across all model ranges is over four months.
The semiconductor crisis has limited car production, which is estimated at 300,000 units at Renault and over 100,000 units at Ford. In any case, everyone is in the starting blocks. Automotive supplier Forvia, born from the merger of Faurecia and Germany’s Hella, posted operating results on Monday that exceeded expectations for the first half of the year. And the orders went. Proof of automakers’ optimism about rebounding sales.
Complete order books
Due to a shortage of semiconductors and a partial shutdown of production, manufacturers cannot meet demand. VW has an order book including all engine types for 728,000 vehicles for Europe alone, including around 139,000 IDs. with 100% electric motors. However, in the first half of 2022, the German brand was only able to deliver 488,468 vehicles. The Group is working to further reduce delivery times for customers and process a large backlog of orders as quickly as possible. It’s the same at Renault or Stellantis, where orders are going well. Rate hikes will be gradual. But at the moment it is impossible to deliver faster.
Additional costs for raw materials
If the accelerated transition to electricity and the semiconductor crisis seem to be on the way to resolution, the rise in the cost of raw materials remains the main problem that automakers must face.
For the year (January 2021-2022), the price of lithium has increased by 13% since the beginning of 2022. The price of nickel has increased by almost 60% since 2020. Over the same period, the price of copper rose by 27%. %, palladium by 30%. As for rubber, its growth over the past year has reached 16%. Not to mention rising energy prices. Consequence: The cost of producing an electric vehicle increased by 4,500 euros compared to 2020. This affects primarily equipment manufacturers, but also manufacturers. In Renault, for example, the consequences are estimated at 797 million euros. After raising selling prices on their cars to improve their margins, manufacturers can’t get past all this inflation. Over the past three years, the price of new cars has jumped by 20%. And it seems very difficult to get the client to bear the full amount of current and future increases. Because if there is a recovery in production, commodity prices will continue to rise. As a result, some brands are reinsured for the future.
GM chairman Mary Marra does not hide her concerns regarding economic conditions ” to the point ” for also simulating numerous slowdown scenarios. “Same story at Volkswagen. ” We expect the impact of commodity and energy prices in the second half of 2022 to be significantly higher than in the first half. says Alexander Seitz, chief financial officer of Volkswagen.
Despite rising prices for raw materials and energy, builders are revising their forecasts upwards. ” We are confident that we can more than offset this price increase and continue our positive momentum. Therefore, we raise our forecast on the condition that the supply situation develops in line with expectations. For the whole of 2022, we expect an operating margin of sales before special items of 4-5%. “, assures VW’s CFO. Renault is also revising its financial projections for 2022 upwards. Like almost all manufacturers. We are talking about an automotive crisis! What crisis?