Fact Check: Automotive manufacturing profits drop 11.9% from last year.

Fact Check: Automotive Manufacturing Profits Drop 11.9% from Last Year

What We Know

The claim that automotive manufacturing profits have dropped by 11.9% from the previous year is a significant assertion that requires careful examination. According to a report by Capstone Partners, the automotive industry has faced considerable challenges, including geopolitical risks, wage inflation, and labor shortages, which have negatively impacted profitability across various manufacturers (Capstone Partners). The report highlights that major European OEMs have experienced year-over-year declines in operating profitability, indicating a broader trend of financial strain within the industry (Capstone Partners).

However, contrasting data from the Haig Partners Q1 2025 report suggests that while profits have faced pressures, the overall decline in dealership profits was only about 1% year-over-year (Haig Partners). This discrepancy raises questions about the specific context of the 11.9% figure and whether it pertains to a particular segment of the automotive industry or a broader average across all manufacturers.

Analysis

The claim of an 11.9% drop in automotive manufacturing profits appears to be partially substantiated by the broader trends reported in the automotive industry. Capstone Partners notes a significant deterioration in operating conditions, especially among European manufacturers, which supports the notion of declining profits (Capstone Partners). However, the specific figure of 11.9% is not directly corroborated by the available data.

Moreover, the Haig Partners report indicates that while there are pressures on profits, the decline is much less severe at only 1% for auto dealerships, which may suggest that the automotive manufacturing sector's profitability is more nuanced than the claim implies (Haig Partners). The difference in reported profit declines could stem from different methodologies or focus areas (e.g., manufacturing vs. dealership profits).

Additionally, the automotive industry is undergoing significant transitions, particularly with the rise of electric vehicles (EVs) and changing consumer preferences. These shifts may lead to varying profit margins across different segments of the industry, complicating the overall picture of profitability (Capstone Partners).

Conclusion

The claim that automotive manufacturing profits have dropped by 11.9% from last year is Partially True. While there is evidence of declining profitability in the automotive sector, particularly among European manufacturers, the specific figure of 11.9% lacks direct corroboration and may not represent the entire industry accurately. The context of the decline, including the differences between manufacturing and dealership profits, suggests that the situation is more complex than the claim indicates.

Sources

1. Myynti ja asiakaspalvelu
2. Automotive Industry Update - Capstone Partners
3. Täyssähköauton suosio tuplaantui työsuhdeautoilijoiden …
4. PDF Auto Dealership Profits Remain High Despite Political, Economic Pressure
5. Tiedonsiirto
6. PDF Automotive Industry Insights Report - Spring 2024 - Executive Summary
7. Uutiset
8. PDF Contents - February 20, 2025 - autosinnovate.org