The withdrawal of German automakers from Russia did not prevent them from improving their financial performance and even achieving records. BMW, Mercedes-Benz, Volkswagen and Daimler Truck reported hundreds of billions of euros in 2022 revenues.
BMW and Daimler Truck have record profits, Mercedes-Benz has record high profit margins, Volkswagen has record dividends.
DW writes that last year was very successful for the German automakers, especially in financial terms. Their reports for 2022, which deal with revenues of tens and hundreds of billions of euros, show that last year’s exit from the Russian market went almost unnoticed for the German car industry.
Daimler Truck: trucks and buses are in great demand
Let’s take BMW. A year ago, immediately after the Russian attack on Ukraine, he stopped both the export of his cars to Russia and their production at the Avtotor plant in Kaliningrad. And now, on March 9, the Bavarian automaker presented its financial report for last year. The key figure in it: net profit grew by 49% and reached 18.6 billion euros, unprecedented in company history.
Another example: Daimler Truck. The world’s largest manufacturer of trucks and buses reported on March 10 about the first full year of independent existence after the division of the Daimler AG holding into two companies (the second was Mercedes-Benz, which produces cars).
A year ago, Daimler Truck did not “freeze” its business in Russia for an indefinite period, as many other Western firms did, but immediately severed all relations with its partner KAMAZ, which produces vehicles for the Russian army that broke into Ukraine. After exiting the Daimler KAMAZ Rus joint venture in Naberezhnye Lodki, where the German investor left all his assets, a loss of 200 million euros had to be written off.
And now Daimler Truck has announced that its worldwide revenue was 50.9 billion euros last year. This is an increase of 28% compared to 2021 figures. But even more, by 55% to almost 4 billion euros, EBIT increased. This is a record, the concern notes: as part of the Daimler AG holding, the cargo division has never earned so much.
BMW: sold fewer cars, but much more expensive
Such a significant improvement in financial performance was facilitated both by the growth in sales of trucks and buses by 14% to 520,300 units, and by the fact that Daimler Truck was able to push higher prices for its products in the markets of different continents. On the contrary, sales volumes of passenger car manufacturers fell: by almost 5% for BMW, and even for 7% for Volkswagen.
However, both automakers improved their financial performance. At BMW, profit, as already noted, grew by almost half, and revenue – by 28%, reaching 142.6 billion euros. Volkswagen’s revenue increased by 12% to 279.2 billion euros, while net income increased by about 3% to 15.8 billion euros.
The fact is that the effect of 2021 was repeated, when, due to disruption in the supply chains of components and especially due to the shortage of microchips, automakers relied on the production of the most expensive and profitable models.
Mercedes-Benz: the production of “Mercedes” is increasingly profitable
It is clear that automakers specializing in premium cars such as BMW and Mercedes-Benz benefited more from such a strategy. The manufacturer of passenger cars “Mercedes” is generally guided by the motto: “Margin is more important than sales.” However, last year, unlike its Bavarian competitor, it managed to increase sales of passenger cars by 5%, and minivans and light commercial vehicles by 8%.
Like BMW, Mercedes-Benz’s net income grew faster in 2022 (up 34% to €14.8 billion) than revenue (up 12% to €150 billion). This indicates a special profitability of the business. Indeed, in last year’s report, published on February 17, the concern specifically noted that the margin (rate of return) on the sale of Mercedes cars reached 14.6%, which this former division of the Daimler AG holding had never achieved before. For the automotive industry, this is a very high figure.
As for the Mercedes-Benz business in Russia, in March last year, the concern first suspended the export of its cars to the Russian Federation and their production at its relatively small enterprise in Esipovo near Moscow, and in October 2022 announced the sale of five.
Source: Racurs
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.