In this article, we will delve into the world of automobile manufacturing to explore the 15 most profitable car companies. We’ll skip the technical details and instead focus on the top performers in the industry. The automotive sector is not just an economic powerhouse, but also a reflection of a country’s economic well-being. According to ACEA, over 85 million motor vehicles were produced worldwide in 2022, reflecting a 5.7% increase from the previous year.
The Automotive Industry’s Global Impact
The automotive industry not only contributes around 3% to the global GDP but also plays a significant role in emerging markets like India and China, where it accounts for 7% of the GDP. Directly employing over 4 million people worldwide, the industry also supports numerous businesses and industries. In the United States alone, around 4.5% of all jobs are related to the auto industry, resulting in over $500 billion in annual compensation and $70 billion in tax revenues, as revealed by the Center for Automotive Research.
China: The Largest Automobile Manufacturer
China stands as the global leader in automobile manufacturing. The Chinese Association of Automobile Manufacturers reported that the country produced 27 million vehicles in 2022, with sales reaching 26.86 million units. The United States follows in second place with 14.9 million vehicles produced in the same year.
Toyota: The World’s Top-Selling Automaker
Toyota Motor Corporation dominates the global automotive market, maintaining its position as the world’s top-selling automaker in 2022. The Japanese giant sold over 10 million vehicles worldwide, attributing its success to strong demand in Asia, increased production capacity, and optimization in Asia and North America. The Volkswagen Group secured the second position, selling 8.3 million vehicles in 2022.
When it comes to the electric vehicle market, Chinese auto manufacturer BYD Auto took the lead with over 1.8 million EV units sold in 2022. Tesla came in second, with 1.3 million EVs sold worldwide.
The COVID-19 Pandemic and the Semiconductor Chip Shortage
The COVID-19 pandemic wreaked havoc on the global auto manufacturing sector, disrupting supply chains and operational activities. Social-distancing practices and lockdowns temporarily halted production in countries like Japan, the United States, and numerous other large markets. Ford Motor Company reported an 18.4% decline in sales in 2020 compared to the previous year.
Adding to the industry’s challenges, a global shortage of semiconductor chips further impacted automobile manufacturing. These chips are vital for processing information in vehicle subsystems, enhancing efficiency and safety. The demand for chips increased dramatically with the rise in electric vehicles, causing the global semiconductor industry to struggle to keep up. The shortage escalated lead times for vehicle manufacturing from an average of 3 to 4 months to 10 to 12 months. As a result, automakers suffered an estimated $210 billion loss in revenue in 2021.
However, as COVID-19 restrictions eased worldwide, automobile sales rebounded. Consumers who had postponed purchases during lockdowns resumed buying activities, helping mitigate the effects of the semiconductor shortage. Market Research Future predicts that the global automotive industry will reach $6 trillion by 2030, with a Compound Annual Growth Rate of 6.9%.
Methodology
To compile our index, we selected the largest publicly listed auto manufacturers that reported sales of at least 500,000 units worldwide. These 15 companies represent some of the largest and most profitable car companies globally, earning a combined total reported profit of around $128.4 billion in 2022.
15. Isuzu
- Net Profit in 2022: $0.9 billion
- Revenue in 2022: $18 billion
- Profit to Revenue Ratio: 5%
Isuzu sold over 771,000 units worldwide in 2022, a 7% increase from the previous year. The Japanese company aims to produce 300,000 electric vehicles by 2030. With over 44,000 employees worldwide, Isuzu is an industry leader.
14. Hyundai Motor
- Net Profit in 2022: $7.36 billion
- Revenue in 2022: $142.53 billion
- Profit to Revenue Ratio: 5.2%
Founded in 1967, Hyundai Motor reported over 3.94 million units sold globally in 2022, marking a 1.4% increase from the previous year. The company is transitioning to electric vehicles, aiming for global sales of 4.32 million units in 2023.
13. Subaru
- Net Profit in 2022: $1.43 billion
- Revenue in 2022: $27.08 billion
- Profit to Revenue Ratio: 5.3%
Subaru reported sales of over 850,000 vehicles in 2022, with a significant portion sold in Japan. The company has ambitious plans to manufacture and sell over 200,000 electric vehicles by 2026 and 400,000 by 2028. Subaru heavily relies on the North American market.
12. Volkswagen Group
- Net Profit in 2022: $16.61 billion
- Revenue in 2022: $300 billion
- Profit to Revenue Ratio: 5.4%
As the largest automaker globally, Volkswagen Group recorded a revenue of approximately $300 billion in 2022. The company aims to surpass Tesla in the global electric vehicle market by 2025. Porsche, a subsidiary of the Volkswagen Group, boasts the highest profitability in the luxury mass-market segment.
11. Great Wall Motors
- Net Profit in 2022: $1.16 billion
- Revenue in 2022: $19.2 billion
- Profit to Revenue Ratio: 6%
Great Wall Motors reported sales of over 1.06 million vehicles in 2022, with over 173,180 units sold in international markets. The company expanded into the new energy market, selling over 610,000 new energy vehicles in the same year.
10. Kia
- Net Profit in 2022: $4.2 billion
- Revenue in 2022: $67.2 billion
- Profit to Revenue Ratio: 6.3%
Kia, the second-largest auto manufacturer in South Korea, announced sales of 2.9 million vehicles in 2022, representing a 4.6% increase from the previous year. The Sportage SUV emerged as the top-selling vehicle, with 452,068 units sold. Kia’s efficient supply chain management and successful product launches contributed to a 13.5% increase in profits from 2021.
9. General Motors Company (NYSE:GM)
- Net Profit in 2022: $9.93 billion
- Revenue in 2022: $156.73 billion
- Profit to Revenue Ratio: 6.3%
General Motors Company, once the largest car company globally, operates manufacturing plants in eight countries. The company plans to invest over $1 billion in two Michigan plants for manufacturing next-generation heavy-duty trucks. General Motors Company and Stellantis N.V. paid a total of $363 million in civil penalties for not meeting U.S. fuel economy requirements.
8. Changan Automobile
- Net Profit in 2022: $1.09 billion
- Revenue in 2022: $17 billion
- Profit to Revenue Ratio: 6.4%
Founded in 1862, Changan Automobile is China’s oldest automaker, with plans to achieve group sales of 5 million vehicles by 2030. The company aims for over 60% of sales to be new energy vehicles and 30% to come from overseas markets.
7. Toyota Motor Corporation (NYSE:TM)
- Net Profit in 2022: $17.59 billion
- Revenue in 2022: $266.6 billion
- Profit to Revenue Ratio: 6.6%
Toyota Motor Corporation boasts the highest revenue among Japanese car companies. In addition to its automotive sales, the company experienced a substantial increase in industrial equipment sales, particularly forklifts. Toyota became the top-selling car brand in the U.S. in 2022, a position held by General Motors since 1931.
6. GAC Motor
- Net Profit in 2022: $1.13 billion
- Revenue in 2022: $15.4 billion
- Profit to Revenue Ratio: 7.3%
Despite the pandemic, the semiconductor chip shortage, and increasing raw material prices, Guangzhou Automobile Group sold over 2.4 million vehicles in 2022. The company has ambitious plans to sell over 4.75 million vehicles and achieve a revenue of RMB 1 trillion by 2030.
Continue reading to discover the top 5 most profitable car companies in the world.
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