World’s biggest car makers suffer as profits plummet in 2018

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Despite a year of innovation and a surge in new product, the value of the automotive industry’s biggest global companies fell by £100bn in 2018.

It was well documented that the industry was plagued with problems around the world last year, caused mainly by import tariffs, political pressures and fuel-type concerns.

Shockingly, 15 of the largest publicly listed car manufacturers all dropped in value. At the start of the year, they had a shared market value of almost £700 billion but by the end of the year this had dropped by £122bn to £588bn.

As one of the largest automotive companies, it is possibly not unsurprising that Mercedes parent company Daimler felt the problems the most and issued two profit warnings – with its value falling by £22bn.

Ford saw the second biggest drop, down £13bn, with Volkswagen close behind, down £12bn.

Speaking to the Telegraph, professor David Bailey of Aston University commented: “The shares of some car companies – such as Ford – have been in decline for several years, but 2018 saw a sharp reversal for others that had previously been doing well.

“This has been driven by both sector-specific and broader economic trends. From a sector point of view, diesel’s demise has dented profits and companies are having to invest heavily in new technologies such as electric and autonomous cars.”

He added: “The threat of a tariff war between the US and China and a big slowdown in China has dented growth prospects.”