Multinational automakers have recently released their financial reports for the second quarter and first half of 2025. Fierce market competition, coupled with tariffs, has triggered red alerts for the performance of many automakers. Major automakers such as Volkswagen Group, Mercedes-Benz, BMW, Hyundai Motor, Kia, and General Motors have seen year-on-year net profit declines of 20%-60%. Stellantis Group, Nissan, Renault, Ford, and Volvo Cars have even incurred losses.
German car companies' profits collectively plunge
First, it's worth noting that profits for all three major players in Germany's auto industry plummeted. Volkswagen Group's financial report shows that in the first half of 2025, its revenue was €158.4 billion, a slight year-on-year decrease of 0.3%. Operating profit plummeted 33%, from €10 billion in the same period last year to €6.7 billion. Of this, tariffs alone accounted for €1.3 billion of the losses.
Volkswagen Group is currently facing pressure in key markets. In the United States, the Trump administration's tariffs are eroding revenue and profits for the import-reliant Audi and Porsche brands. In Europe, weak demand and high production costs are also weighing on Volkswagen Group's profits. In China, consumers are increasingly favoring domestic brands, and Volkswagen Group is losing market share. As a result, Volkswagen Group has lowered its full-year outlook.
Mercedes-Benz Group's earnings were also diluted by tariffs, particularly in the second quarter, where revenue fell 9.8% year-on-year to €33.153 billion. Net profit plummeted 68.7% year-on-year to €957 million, marking its worst quarterly performance in nearly four years. Affected by the second quarter's performance, the company also saw a significant decline in the first half of the year, with revenue down 8.6% year-on-year to €66.377 billion and net profit down 55.8% year-on-year to €2.688 billion.
Mercedes-Benz Group believes that the main reasons include: decreased vehicle deliveries, weak pricing, negative exchange rate effects, and reduced contributions from joint ventures. The company also said that due to tariffs hitting car sales, it expects full-year revenue in 2025 to be significantly lower than last year.
BMW Group also saw a decline, though its decline was slightly less severe than its two peers. Data showed that its revenue in the first half of the year fell 8% year-on-year to €67.685 billion; net profit was €4.015 billion, a 29% year-on-year decrease. However, BMW Group maintained its full-year financial outlook for 2025. The company stated that its extensive manufacturing presence in the United States gives it an advantage over its competitors, but tariffs still impacted BMW Group's financial performance, and Trump's separate tariffs on steel and aluminum also had a broader impact on the automotive industry.
The EU and the US recently reached an agreement that the US will impose a new 15% tariff on cars imported from the EU, lower than the current 27.5%, but still a significant obstacle to the export-oriented businesses of European automakers. Furthermore, the EU's additional tariffs on Chinese-made pure electric vehicles have also posed challenges to some European automakers, such as BMW, which produces electric Mini models in China through a joint venture.
Tariffs hit, profits evaporate
Besides German automakers, Japanese and Korean automakers were also affected. Hyundai Motor's second-quarter revenue grew, but its net profit fell 22% year-on-year to 3.25 trillion won (approximately 16.8 billion yuan). U.S. tariffs reportedly cost the company 828 billion won (approximately 4.3 billion yuan) in the quarter.
Kia Motors also achieved record revenue in the quarter, but operating profit fell 24% year-on-year to 2.76 trillion won (approximately 14.3 billion yuan). Reportedly, the 25% tariff imposed by the United States on imported vehicles, effective in April, directly caused Kia's operating profit to evaporate by 786 billion won (approximately 4.1 billion yuan) in the second quarter. This significant discrepancy between revenue and profit clearly exposes the impact of US tariffs on the global automotive industry.
On the Japanese side, Mitsubishi Motors' net profit in the second quarter was almost completely wiped out, plummeting from 29.5 billion yen (about 1.4 billion yuan) in the same period last year to almost zero.
American automakers are also facing pressure. For example, General Motors saw a slight year-on-year increase in revenue in the first half of the year, but its net profit fell 21% year-on-year to $4.68 billion. In the second quarter, net profit was $1.895 billion, a 35.4% year-on-year decrease. GM expects the impact of tariffs to intensify in the third quarter and maintains its previous forecast that trade headwinds could cost the company $4 billion to $5 billion in profits.
Many companies are mired in losses
Of course, it would be unfair to blame all the setbacks on tariffs. Take car companies such as Nissan and Stellantis as examples. These companies had already experienced business downturns before the tariffs came into effect, and the tariffs have exacerbated their plight, with more than just one or two companies suffering losses.
Specifically, in the first half of this year, the Stellantis Group delivered an extremely dismal report card, with a net loss of 2.256 billion euros, compared with a net profit of 5.647 billion euros in the same period last year, turning from profit to loss. The North American and European markets became a drag. Non-recurring expenses also exacerbated the losses. In the first half of the year, the group set aside several special project expenses, including the suspension of fuel cell projects, platform impairment, and emission fines, totaling 3.2 billion euros. Faced with multiple challenges, under the leadership of the new CEO Antonio Filosa, who took office on June 23, Stellantis plans to gradually restore the company's performance in the second half of the year, and it is expected that the profit margin will return to the "low single digit" range.
In contrast, Nissan's losses were within the industry's expectations. Following a net loss of 670.9 billion yen (approximately 32.6 billion yuan) in fiscal year 2024 (April 2024-March 2025), Nissan reported another net loss of 115.8 billion yen (approximately 5.6 billion yuan) in the second quarter of this year. Nissan cited the combined impact of exchange rate fluctuations and US tariffs as the cause of the losses. Under the leadership of newly appointed President Ivan Espinosa on April 1st, Nissan is embarking on a global self-rescue effort, including laying off 20,000 employees, closing seven factories, and promoting R&D and supply chain innovation.
It's worth noting that Nissan's losses have dragged down its alliance partner, Renault. In the first half of this year, Renault Group's revenue reached €27.6 billion, a year-on-year increase of 2.5%. Its operating profit margin fell to 6% from 8.1% in the same period last year. Its net loss was €11.143 billion, of which €9.3 billion was due to the impairment of its Nissan equity investment alone. Furthermore, even excluding the Nissan equity write-down, Renault Group's net profit in the first half of the year was only €461 million, less than one-third of the €1.469 billion in the same period last year. However, Renault Group's new CEO, François Provost, took office on July 31st, and the company's profit margin is expected to return to the previous year's level in the second half of the year.
Two other automakers reported losses were Ford and Volvo Cars. Ford reported a net loss of $36 million in the second quarter, primarily due to recall costs and an $800 million negative impact from tariffs. Volvo also reported an operating loss of 10 billion Swedish kronor (approximately 7.4 billion yuan) in the second quarter. Volvo is considered one of the European automakers most affected by US tariffs.
It can be seen that in the first half of 2025, the global automotive giants collectively experienced a performance downturn. The impact of tariff policies, like dominoes, triggered a chain reaction across major markets. Combined with multiple factors such as weak market demand, intensified competition, and internal business adjustments, automakers from Europe, Japan, South Korea, and the United States are generally facing the severe challenge of declining profits or even losses. Many companies have launched self-rescue measures such as leadership changes, strategic adjustments, and cost reductions in an attempt to reverse the downward trend. Under such circumstances, the pace of industry reshuffle and transformation is likely to accelerate further.
(Original title: "Volkswagen, Mercedes-Benz, BMW, Stellantis, Nissan...International giants sound the alarm")