While Europe Weeps, Winterkorn And Zetsche Laugh
It looks more and more like a divided Europe. While carmakers Opel, Ford, PSA, Fiat etc. are wailing with pain, German carmakers report expectation-beating profits.
Germany’s Daimler reports an EBIT of €2.24 billion ($2.75 billion) and a net profit of €1.51 billion ($1.86 billion) for the second quarter of 2012. The profits would have been higher without the startup costs for the new A-Class. For the half year, that’s €4.37 billion ($5.36 billion) in EBIT and €2.931 billion ($3.59 billion) after tax.
From Wolfsburg, Volkswagen reports a pre-tax profit of €10.1 billion ($12.4 billion) , and a net profit of €8.8 billion ($10.8 billion) for the first half year.
Why are they doing well when others don’t? “Our strong position in international markets will enable us to outperform the market as a whole, despite the challenging environment,” VW CEO Martin Winterkorn said.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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As a country They have become very aggressive towards other car makers. VW opened a plant in the US with employee benfits and pay that are not even close to their German counter parts. In addition The German government is investigating the alliance of PSA/GM on competition grounds. http://www.just-auto.com/news/cartel-office-extends-psagm-alliance-probe-to-september_id124819.aspx Talk about kicking a country when it's down.
+2 on that The reason companies are investing so much in a foreign factories, is because the costs of operating those factories are lower. And....Wages and benefits are a significant portion of that cost.
Renault seems to be doing fine, although European, although primarily in small cars. Better long-term strategy, I'd presume.
I am not shocked at all...arent most profits now made on financing and in the service department for car makers? The Germans should be making more profit than the Government of Saudi Arabia.