In this article, we are going to discuss the 15 most profitable car companies in the world. You can skip our detailed analysis of the statistics and economic impact of the automobile manufacturing sector, effects of the Covid-19 pandemic, impact of the global semiconductor chip shortage on vehicle manufacturing and the future outlook of the sector and go directly to 5 Most Profitable Car Companies in the World.
The automobile manufacturing sector is one of the largest industries worldwide. Often, a country’s automotive sector is a reflection of its broader economic condition. According to ACEA, 85.4 million motor vehicles were produced around the world in 2022, an increase of 5.7% from 2021.
The automotive industry contributes around 3% to the global GDP and this share is even higher in emerging markets like India and China, where the auto sector accounts for 7% of GDP. The industry employs over 4 million people worldwide directly and even more indirectly through the businesses and industries that it supports. The Center for Automotive Research has revealed that around 4.5% of all U.S. jobs are supported by the country’s auto industry and people working in these jobs collectively earn over $500 billion annually in compensation and contribute over $70 billion in tax revenues.
Largest Automobile Manufacturer Country in the World
China is the largest automobile manufacturing country in the world. The Chinese Association of Automobile Manufacturers has revealed that the country’s carmakers produced 27 million vehicles in 2022, up by 3% from 2021, while sales increased by 2.1% to 26.86 million units. The U.S. comes in at second, with 14.9 million vehicles produced in 2022.
Car Company that Sells the Most Cars in the World
Toyota Motor Corporation (NYSE:TM) retained its title as the world’s top-selling automaker in 2022. The company reported sales of over 10 million vehicles worldwide in 2022. The Japanese manufacturer, which is also one of the most profitable car companies in the world, said that strong demand in Asia and an increase in production capacity, along with optimisation in Asia and North America helped it boost global production by 5% in 2022. The Volkswagen Group ranked second, with 8.3 million vehicles sold in 2022.
When it comes to the electric vehicles market, the Chinese auto manufacturer BYD Auto led the pack with over 1.8 million EV units sold in 2022. Tesla, Inc. (NASDAQ:TSLA) came in at second with 1.3 million EVs sold worldwide.
The Covid-19 pandemic had a devastating impact on the global auto manufacturing sector, disrupting its supply chains and operation activities. When the Chinese cities were put into lockdown, global car manufacturers struggled with the shortage of parts to keep their industry engines running. Eventually, as the virus spread to other countries, production in Japan, the U.S. and several other large markets came to a complete halt due to social-distancing practices. An example of this is Ford Motor Company (NYSE:F), which reported an 18.4% decline in its sales in 2020, compared to the previous year.
Another major problem that the automotive sector has been faced with is the global semiconductor chip shortage. In conventional automobiles, chips process information in various vehicle subsystems that improve a vehicle’s efficiency and make driving safer. According to a study by the United States International Trade Commission, conventional vehicles had approximately $330 worth of chips in 2019 and this number has risen even further now. Additionally, the adoption of electric vehicles, with their more complicated systems, has raised the demand for semiconductor chips even higher.
The global semiconductor industry has struggled to keep up with this rising demand, mainly due to Covid-19 disruptions, trade action uncertainty and accelerated digital transformation. A report by Techwire Asia has revealed that the shortage of semiconductors had caused vehicle manufacturing lead times to increase from an average 3 to 4 months, to an average of 10 to 12 months. Automakers around the world lost an estimated $210 billion in revenue in 2021 due to the chip shortage.
However, the easing of Covid-19 restrictions globally boosted automobile sales, as consumers who had put off purchases during lockdowns finally started buying again, which has helped outweigh the effects of the semiconductor shortage. According to Market Research Future, the global automotive industry is projected to reach $6 tillion by 2030, with a Compound Annual Growth Rate of 6.9%.
Photo by Igor Stepanov on Unsplash
Methodology
To gather data for our index, we have selected some of the largest auto manufacturers in the world, that are publicly listed and reported sales of at least 500,000 units worldwide. Then we ranked them according to their profit to revenue ratios for the year 2022. These 15 companies are some of the largest and most profitable car companies in the world and earned total reported profits 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%
The Japanese company announced that it sold over 771,000 units worldwide in 2022, a 7% increase from the previous year. Isuzu aims to go from making zero electric vehicles to 300,000 EVs in its own plants by 2030. The auto manufacturer boasts over 44,000 employees worldwide.
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 employs over 121,000 worldwide and sold over 3.94 million units globally in 2022, a YoY increase of 1.4%. Hyundai was also able to accelerate its transition to electrification last year, thanks to the strong sales of IONIQ 5 and the successful launch of IONIQ 6. In 2023, Hyundai is aiming for global sales of 4.32 million units.
13. Subaru
Net profit in 2022: $1.43 billion
Revenue in 2022: $27.08 billion
Profit to Revenue Ratio: 5.3%
The Tokyo-based automaker reported sales of over 850,000 vehicles in 2022, with over 100,000 units sold in Japan only. Subaru is targeting to make and sell electric vehicles, aiming for global sales of over 200,000 EVs by 2026 and 400,000 by 2028. The company is known for its dependence 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%
Volkswagen is currently the largest automaker in the world, with a reported revenue of approximately $300 billion in 2022. The German car maker has set an ambitious target to overtake Tesla, Inc. (NASDAQ:TSLA) in the global EV market by 2025 and doubled its EV production in 2021 to 452,000. To meet its targets, the richest car company in the world has set aside $100 billion for EV production expenditures to be used by 2026.
Under the umbrella of the Volkswagen group, Porsche is the most profitable car company in the luxury mass-market, with an operating profit of $7.2 billion in 2022.
11. Great Wall Motors
Net Profit in 2022: $1.16 billion
Revenue in 2022: $19.2 billion
Profit to Revenue Ratio: 6%
The privately-owned Chinese automobile manufacturer reported sales of just over 1.06 million vehicles in 2022, exceeding 1 million sales for seven years in a row. A total of 173,180 vehicles were sold in markets outside of China, up 21.3% from the previous year. GWM Haval has expanded into the new energy market, with total sales of over 610,000 vehicles in 2022.
10. Kia
Net Profit in 2022: $4.2 billion
Revenue in 2022: $67.2 billion
Profit to Revenue Ratio: 6.3%
Kia is the second-largest auto manufacturer in South Korea, right after its parent company Hyundai Motor. The auto manufacturer is one of the top most profitable car companies in the world. Kia announced that it sold 2.9 million vehicles in 2022, a 4.6% increase from the previous year. The Sportage SUV topped its global sales ranking with 452,068 units sold in 2022.
The company reported a 13.5% increase in profits from 2021, which can be attributed to its efficient supply chain management strategies and the successful launches of the all new Niro and the 2024 Seltos.
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%
Operating manufacturing plants in 8 countries, General Motors Company (NYSE:GM) was the largest car company globally, before losing the top spot to Toyota Motor Corporation (NYSE:TM) in 2008.
General Motors Company (NYSE:GM) has also recently announced plans to invest over $1 billion in two Michigan plants to manufacture its next-generation heavy-duty trucks. General Motors Company (NYSE:GM), along with Stellantis N.V. (NYSE:STLA), has also recently paid a total of $363 million in civil penalties for failing to meet U.S. fuel economy requirements for prior model years.
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 is China’s oldest automobile maker. The state-owned car manufacturer is headquartered in Chongqing. The company sold over 2 million vehicles in 2022, ranking 5th among Chinese auto manufacturers. Chairman Zhu Huarong has revealed the company’s plans to achieve group sales of 5 million vehicles by 2030, with over 60% of NEVs sales and 30% of overseas sales.
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%
With a revenue of $266.6 billion, Toyota Motor Corporation (NYSE:TM) is also the largest Japanese car company by revenue. The company’s sales of industrial equipment, particularly forklifts, also boomed 25% to $12.9 billion. In 2022, Toyota Motor Corporation (NYSE:TM) became the top seller of cars in the U.S., marking the first time that the General Motor Company (NYSE:GM) missed out on the No. 1 spot since 1931.
6. GAC Motor
Net Profit in 2022: $1.13 billion
Revenue in 2022: $15.4 billion
Profit to Revenue Ratio: 7.3%
The Guangzhou Automobile Group revealed that it sold over 2.4 million vehicles in 2022, despite pressure from the pandemic, the extended chip shortage and increase in raw material prices. GAC is planning sales in excess of 4.75 million vehicles and achieve a revenue of RMB 1 trillion by 2030.
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Disclosure: None. 15 Most Profitable Car Companies in the World is originally published on Insider Monkey.
