German automakers suffer revenue drop to 284 billion euros as global rivals gain

Revenue and earnings contraction

Volkswagen, Mercedes-Benz, and BMW recorded combined revenues of roughly 284 billion euros in the first half of the year, representing a 2.9% decline compared to the same period in 2025. Although their total revenue remained 1.5 billion euros ahead of Japanese manufacturers in second place, the result is 7% lower than the revenue generated during the peak year of 2023. The performance marks the third consecutive first-half revenue decrease for the three German carmakers. Across the 19 largest global automotive manufacturers analyzed by consultancy EY, total revenues climbed 3.6% to nearly 1,048 billion euros. While 15 of the 19 companies posted revenue growth, the three German manufacturers occupied 16th, 17th, and 19th place in the growth ranking. The fastest revenue expansions were achieved by Tesla, followed by Suzuki and Geely, while manufacturers based in the United States, Japan, China, and South Korea each reached first-half revenue highs.

Diverging global profitability

Operating profit before interest and taxes (EBIT) for the German trio fell 19.0% to 13.0 billion euros, registering their second-lowest first-half earnings since 2017, behind only the pandemic period in 2020. Despite this decline, VW, Mercedes, and BMW maintained a higher absolute profit total than rivals from other countries. Across the broader group of 19 global manufacturers, combined EBIT rose 11.4% to 43.7 billion euros, the seventh-highest level in the study period, with lower figures recorded in the first halves of 2019, 2020, and 2025. The overall gain was amplified by the fact that several competitors had taken substantial write-downs on electric vehicle operations in the prior year. Profit trends diverged sharply by region during the six-month period. Operating earnings fell 36.5% for Japanese carmakers and 21.9% for Chinese producers, while United States manufacturers Ford, General Motors, and Tesla increased their combined operating profit by 32.9%.

The German manufacturers are not only losing market share, but above all earning power.

Collapsing sales in China

A sharp sales contraction in China contributed heavily to the downturn for German producers, shifting the region from a primary profit generator to a liability. Sales by Volkswagen, Mercedes-Benz, and BMW in China dropped 25% from January to June compared to the previous year. China accounted for 23.5% of the trio's global vehicle deliveries during the first half, down from 28.9% recorded twelve months earlier. Sluggish economic growth in China reduced demand for high-end premium models, while domestic customers consistently chose domestic brands in the growing electric vehicle segment. EY sector analyst Constantin Gall identified China as the single largest business risk facing German automakers, noting that solid sales performance in Europe cannot compensate for losses of this scale.

Structural costs and labor tensions

The EY report identified domestic structural factors as a primary challenge for German manufacturers, citing insufficient wage-cost productivity, high energy expenses, and administrative burdens. Domestic manufacturing facilities, historically regarded as symbols of quality and competitive advantage, have increasingly become a cost burden that impedes rapid corporate transformation. Gall observed that German carmakers are actively shifting investments toward more competitive international locations to protect profitability.

German groups suffer massively from structural cost disadvantages.

These corporate headwinds coincide with tens of thousands of planned job cuts across the German automotive industry. In response to mounting job losses and restructuring plans, the industrial union IG Metall announced demonstrations across more than 200 locations on Monday.