Profits of German car makers Mercedes and Volkswagen plummet | Car companies

Both companies saw their net profit decline by more than a fifth. In addition to moderate demand, Volkswagen also points to competition as a reason for the decline. At the same time, Mercedes sees that consumers are postponing the purchase of a new car because they are waiting for newer models. The company also cites high inflation and central bank interest rate increases as reasons for declining sales figures.

Volkswagen hopes to turn the tide by launching thirty new models this year for all the company’s car brands, such as SEAT and Audi. Mercedes expects limited growth and thinks that demand for cars will remain weak this year.

While Volkswagen’s own car sales are declining on all fronts, the sales figures of the Chinese electric car manufacturers in which the German group invests actually increased by 6 percent. Sales of Chinese electric car brands in which Volkswagen has interests account for more than a third of Volkswagen’s total sales figures and that ratio is increasing. For example, earlier this year the German car company took a stake of more than 650 million euros in the Chinese car brand XPENG, with which it is jointly developing two electric car models.

Stellantis, the car manufacturer behind brands such as Jeep, Peugeot, Opel and Fiat, also saw sales figures decline. Like Mercedes, the group points to a moderate demand for electric cars. By launching new models later this year, Stellantis hopes to improve results, just like Volkswagen.