The world’s largest carmakers are today mostly making huge profits by lifting production and introducing more premium models, while sales continue to rise rapidly in China and North America, according to management consulting firm McKinsey & Co.
The report from McKinsey is also along the general view expressed in comments by industry executives this week on the sidelines of the annual New York International Auto Show. The latter are very bullish about their luxury units in China and over the US auto market where there’s a massive surge in demand for sport utilities and pickup trucks.
When talking about North America, both automakers and their suppliers learned their lessons from the last Great Recession: restructuring, aligning production output with market demand, cutting costs and consolidating dealer networks, comments McKinsey analyst Hans-Werner Kaas. He added that sales have also gone up on consumer confidence that US producers are increasingly introducing better cars and trucks.
McKinsey’s study also discovered that when it comes to the globe’s 21 largest carmakers, around 70 percent of their total profit for 2014 was attributable to China and North America, rising from 65 percent the previous year. Additionally, while luxury and upscale models only accounted for 12 percent of the sales volume seen last year, they managed to bring in 38 percent of the total profit for the companies – soaring from 33 percent in 2013.
China has started to see a “normal” single-digit growth volume, but nevertheless the figures are still substantial, with the country’s luxury market also powerful and still growing faster than the overall sales pace.