The supply chain bottlenecks, record inflation, and shutdowns at Chinese factories because of COVID-19 restrictions have deepened automakers’ uphill battle this year, causing colossal revenue and market cap drops.
According to data presented by AugustaFreePress.com, the combined market cap of Toyota Motor Corp, Volkswagen AG, Mercedes Benz Group, Ford Motor Co., and Honda Motor Co. Ltd, the world’s five largest automakers, has halved year-to-date, stumbling from $358bn in January to $182bn last week.
The world’s largest automobile manufacturer according to the Fortune 500 list, the Volkswagen Group, saw its deliveries drop in every major region this year, with Europe hardest hit. Although deliveries rose by 10% in the third quarter as supply chain troubles eased, they remained down 12.9% overall this year at just over 6 million vehicles.
According to YCharts data, the market cap of the German-based automaker dropped by 36% year-to-date, falling from $102bn to $64.4bn last week.
As the second-largest automaker globally, Toyota Motor Corp has lost $74bn or 28% of its stock value since January. Last week Toyota’s market cap stood at $182bn, down from $256bn ten months ago. Mercedes Benz Group follows with a 27% year-to-date drop and a $22.5bn wiped off its market cap.
Also Read: 100% probability of a recession in the US?
Statistics show that Ford Motor Co. has suffered the biggest market cap drop this year of all five largest automakers. In January, the market cap of the US car manufacturer stood at $87.2bn. This figure plunged by 44%, falling to $48.4bn last week. Honda Motor Co. lost $11.6bn or 23% of its market cap in ten months.
The huge drop in stock value of the world’s largest automakers comes as the entire automotive industry continues struggling as a whole. According to a Statista survey, global car sales revenues are expected to drop by $200bn year-over-year to $1.89trn in 2022 and remain around that value next year. This steep revenue drop brought the entire market eight years back, below 2014 levels, when the automotive industry made roughly $1.99trn from car sales.
Statistics show global unit sales are also at their lowest point in years. Statista expects global car sales to hit 67.3 million this year, 6.5 million units less than in 2021 and 2.6 million below 2013 sales figures.