BERLIN, Aug. 28 (Xinhua) -- The downward trend in the global auto industry in the second quarter (Q2) of this year continued, according to an analysis of the key financial figures of the world's 16 largest auto groups presented by auditing and consulting firm Ernst & Young (EY) in Frankfurt on Wednesday.
"The global automotive industry is experiencing a sales and profit crisis that is still primarily cyclical," said Constantin Gall, head of Automotive and Transportation at EY.
According to the study, total profits of the world's 16 largest automotive groups had fallen 18 percent in Q2 of 2019.
The number of vehicles sold declined in all major markets and led to five percent global decline in sales, with only Mitsubishi, Honda, Toyota and BMW selling more new cars than a year ago.
French and U.S. car manufacturers recorded the sharpest declines in vehicles sold, of ten percent and nine percent respectively.
Among the largest automobile groups, Toyota was "slightly ahead" of Volkswagen with a sales growth of four percent while the German car giant recorded a minus of two percent.
"All major sales markets are shrinking, resulting in greater price pressure and declining margins. In addition, there are high investments in areas such as autonomous driving and electric mobility," Gall commented.
However, the majority of companies were able to increase their revenues, "thanks in particular to the SUV boom."
Overall, the revenues of the 16 largest automobile manufacturers rose by 1.3 percent, reaching a new record high, the study found.
The strongest growth was achieved by the German manufacturers with an increase in revenues of 5.2 percent, ahead of the French groups with 4.7 percent.
On the other hand, revenues by U.S. companies declined by 3.0 percent while Japanese manufacturers saw their revenues decline by 1.3 percent.
Further cooperation and partnerships would to be expected in order to master the challenges that lie ahead, also through stricter emission limits, Gall said. "This is the only way to control the enormous costs and risks associated with future investments. In any case, we are at the beginning of a selection process."
Despite the weak global figures, EY's consultants saw good prospects for the German automotive industry. The drop in sales would be comparatively small, and the weak profit trend would be due in particular to one-off effects.
"The German companies have recently cleared the balance sheet of old burdens on a large scale," said expert Peter Fuss, senior advisory partner at EY, with reference to topics such as the diesel crisis and the WLTP (Worldwide Harmonized Light-Duty Vehicles Test Procedure) changeover.
According to Fuss, this "major clean-up" could clear the way for rising profits in the coming financial year at the latest, as German car companies would "not run badly in operational terms."
"They are gaining market share worldwide, making progress with the electrification of the model range and will also reduce costs again with tough cost-cutting measures," Fuss said.
