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German carmakers lag behind global competitors

German carmakers lag behind global competitors

created Forex Club23 May 2024

German carmakers, the flagship brands of Europe's largest economy, are losing market share and generating weaker returns for investors than their global competitors, according to new research by investment platform eToro.

In a nutshell:

  • Share prices of German car manufacturers fell by 21%. since 2014, with Volkswagen at the forefront.
  • The world's 15 largest car manufacturers gained 104%. over the last decade, and this year the increase was 22%.
  • Japanese Toyota increased by 232%. over the last decade, significantly outperforming VW.
  • BMW, Mercedes-Benz and Porsche lag behind electric vehicle market leaders Tesla and BYD.

Decrease in shares of German car manufacturers

Research eToro tracks the performance of the world's 15 largest carmakers and reveals a decade of decline for German publicly traded carmakers (Mercedes-Benz Group, BMW, Volkswagen and Porsche). The group recorded a total share price decline of -9%. last year and -21 percent over the last decade. On average, the 15 largest car manufacturers (including four German brands listed on the stock exchange) saw their share prices increase by 105%. over the last decade, growing by 22%. only in the last year.

In China, the world's largest car market, flagship German carmakers are seeing deliveries decline as they struggle to keep pace with local competitors. Volkswagen was overtaken by China's BYD as the best-selling local brand at the end of 2022, while its market share in China fell to 14,5% last year. (from 19,3% in 2020). Meanwhile, Mercedes-Benz deliveries in China contracted for the third year in a row, falling -2%. in 2023. Deliveries Porsche in China last year also reduced by 15%.

CHECK: Chinese electric cars want to conquer the global market. Will they make it?

German automakers also underperformed in the electric vehicle segment compared to U.S. and Chinese competitors Tesla and BYD. Over the past decade, Tesla's share price has increased by 1229% and BYD's by 374%. Tesla owns 19,9%. global electric vehicle market, while VW, its closest German competitor, holds only 4,8 percent. As much as 84% ​​of the Chinese electric vehicle market is dominated by local manufacturers, and German car brands have only 5%. market share.

Commenting on the data, eToro market analyst Paweł Majtkowski said:

The global publicly traded auto industry is the most fragmented we have ever seen. The German car industry is facing unprecedented price and technological competition. In Europe, many consumers keep older models for longer or decide to give up their cars. Meanwhile, American, Chinese and Indian competitors are developing cheaper models and leading the electric vehicle segment, threatening the market position of German carmakers.

Recently, however, the electric car industry has faced a difficult confrontation with reality. After years of euphoria related to electric drive, sometimes combined with the vision of an autonomous car, we have entered a period when consumer decisions will have the greatest impact on the future of the industry. 

The condition of German car manufacturers is also important for the results of the Polish economy. There are factories in Poland belonging to German concerns, such as Volkswagen near Poznań. Most importantly, we are a serious supplier of components and parts to German car factories. However, it should be noted that the Polish economy is much more diversified and is not as dependent on the results of the automotive industry as the economies of the Czech Republic or Slovakia.

Traditional global competitors are also outperforming publicly traded German car brands. Japanese Honda increased the price of its shares by 50%. within 12 months and by 64 percent within 10 years. In turn, Toyota increased by 95%. over the last year and 232 percent over the last decade.

Index results:

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Individual stock results:

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