WEB DESK: Global carmakers managed to sell more vehicles in the first half of 2025, but the upbeat numbers quickly gave way to sobering financials. Despite a 3 percent rise in sales, revenues slipped and profits collapsed, leaving the auto industry in one of its most fragile states in years.
Sales up, revenues down
According to industry data covering 34 manufacturers, 37.6 million vehicles were sold worldwide between January and June 2025, compared with the same period last year. The increase was powered by Toyota, China’s BYD, and Geely, which together offset steep declines from Stellantis and Tesla.
Yet the boost in volumes failed to translate into higher earnings. Total revenue fell 2 percent year-on-year to $1.4 trillion. Average prices also dropped, slipping from $38,084 per unit in 2024 to $36,074 this year. Analysts point to China’s intense price war as the main driver behind the slide, with automakers slashing sticker prices to stay competitive.
The strategy helped BYD and Geely expand rapidly, with sales climbing 33 percent and 47 percent, respectively. Still, BYD’s revenue grew only 14 percent, while Geely’s remained flat. BYD has now climbed to sixth place in the global sales rankings, but its margins remain thin.
Profits take a severe hit
While sales volume told one story, profitability revealed another. Operating profits across the sector fell by 23 percent to $122.2 billion. The steepest drops were recorded at Stellantis and Nissan, followed by Mercedes, Ford, Tesla, Volkswagen, BMW, Honda, and Kia.
The situation looked even more alarming at the bottom line. Net profits collapsed by 69 percent, falling to $26.6 billion in the first half of the year. That pushed the average net margin across the industry down from 6.1 percent to just 2 percent.
A mix of factors is weighing heavily on automakers. Price battles in China continue to erode margins, while global demand has flattened. Rising costs in Europe, trade disruptions, and uncertainty around tariffs imposed by US President Donald Trump have only added to the storm.
A few bright spots
In a sea of red ink, only a handful of companies managed to buck the trend. Suzuki and Ferrari both grew net profits by 9 percent, while BYD recorded a modest 2 percent gain. Ferrari remained the most profitable carmaker per unit sold, earning an eye-watering $138,764 per vehicle. In comparison, the industry-wide average profit per car was just $706.
Luxury names still dominate the profitability rankings. After Ferrari, Jaguar Land Rover, Porsche, Mercedes, and BMW all ranked among the top five in profit per unit. On net margins, Ferrari again led with 23.4 percent, trailed by Suzuki (9.1 percent), Kia (8.1 percent), Hyundai (7.2 percent), and Great Wall Motors (6.9 percent).
Clouds over the road ahead
The first half of 2025 underscores the fragile balance between volume growth and financial sustainability. Analysts warn that without more flexible regulation in Europe, clearer trade policies in the US, and an end to the destructive price war in China, the global auto sector risks deeper instability.
For now, the world’s biggest carmakers are selling more vehicles than last year. But the shrinking profits show that growth, at least under current conditions, is proving very costly.