Overview

• In the first quarter of 2025, Volkswagen, BMW and Mercedes-Benz saw combined revenues drop 2.3% and profits tumble about one-third, mirroring a 2.9% sales decline and roughly 32% profit loss among US manufacturers.
• Major Chinese firms including BYD and Geely recorded nearly 15% revenue growth and a 66% jump in profits, with Asia accounting for five of the six most profitable automakers worldwide.
• EY analyst Constantin Gall forecasts the downturn will intensify as weak consumer demand, rising production costs and a slow electric vehicle transition strain legacy Western brands.
• Since April, US auto import duties of 25% have further eroded margins for European and American automakers while leaving Chinese producers unaffected by the tariffs.
• Western carmakers have unveiled cost-saving programs with planned job cuts and are being urged to accelerate digitalization, speed up vehicle development and adopt more agile decision-making to stay competitive.