Everyone experienced an unprecedented year in 2020, and it had a huge effect on many industries. Some industries saw sales go through the roof as people were stuck at home through COVID-19 lockdowns, while other industries were hit hard and businesses were forced to close. With so many people at home and not out driving on the roads, how did the automobile industry fare during this time? And which car companies were more successful than others? The team at Alan’s Factory Outlet used data from Fortune’s Global 500 list to find how much the largest car companies earned in profits during 2020 as well as the ones that ended up not being profitable at all.
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Which Car Company Was the Most Profitable in 2020?
The car company that was the most profitable in 2020 was Toyota Motor Corporation, which made a $19.1 billion profit out of the $275.29 billion the company earned in revenue for the year. Toyota’s 2020 profits were 12.4% higher than their 2019 profits, an amazing feat during a year when many other top car brands saw huge drops in their profits.
Volkswagen and Toyota have always risen above the rest in terms of sales, and every year, they battle to be the top car manufacturer. Volkswagen was the only other car company to come close to Toyota in term of profits, landing in second place with $15.54 billion in profit in 2020. Their revenue for the year was close to Toyota’s as well, at $282.76 billion.
- Toyota Motor: $19.1 billion
- Volkswagen: $15.54 billion
- General Motors: $6.73 billion
- BMW: $5.5 billion
- Honda Motor: $4.19 billion
- Volvo: $3.79 billion
- SAIC Motor: $3.71 billion
- Peugeot: $3.58 billion
- China FAW Group: $2.85 billion
- Daimler: $2.66 billion
Why Is Toyota So Popular?
It’s no surprise to see Toyota at the top of the chart for having earned the most profits, even during a year like 2020. Toyota is one of the top car brands, as their vehicles are known for being reliable and reasonably priced as well as stylishly designed. They’re also known to last for a long time, making Toyota the top choice for many car buyers.
Toyota’s top car model, the Corolla, is officially the best-selling car in the world, with more than 49 million sold worldwide since it made its debut in 1966. The Toyota Corolla isn’t the car manufacturer’s only impressive model, though. Through our own research, we found that the Toyota Camry has been the best-selling car model in the United States every year since 1997, save for 2000, when the Honda Accord outranked the Camry as the best-selling model of the year. An average of 398,570 Toyota Camrys are sold in the United States each year, which amounts to 19% of the 2.1 million Toyota vehicles sold in the U.S. in 2020. The American car market made up 22% of the total number of Toyotas that were sold around the world, as global sales for Toyota reached more than 9.5 million vehicles in 2020. While worldwide car sales were down by 10.5%, Toyota’s car sales increased, which helped the company reclaim its title from Volkswagen as the world’s largest car maker.
The least profitable car company in 2020 was Nissan, which had a financial loss of $6.174 billion, a 314.5% decrease from the profits they earned in 2019. Not only were Nissan’s sales affected by the COVID-19 pandemic, but the rising cost of materials such as metal and a chip shortage were partly to blame for the auto company not being able to turn a profit. Tata Motors and Renault were also found to have negative profits in 2020. You would be hard-pressed to find one of these two struggling brands in a garage. Renault had a profit loss of $158 million, while Tata Motors lost $1.703 billion. Ford Motor and Mazda Motor also made the list of the least profitable car companies in 2020 with profits of just $47 million and $112 million respectively, far less than the billions of dollars these major car companies usually make in annual profit.
The Least Profitable Car Companies in 2020
- Nissan: -$6.174 billion
- Tata Motors: -$1.703 billion
- Renault: -$158 million
- Ford Motor: $47 million
- Mazda Motor: $112 million
Even though many top car companies struggled during 2020, others excelled and produced more vehicles compared to 2019. Hyundai Motor had a great year, as they saw their profits increase a whopping 86.5% over their profits earned during 2019. They landed at number 11 on our list with a profit of $2.56 billion during 2020. Hyundai’s giant jump in profits can be attributed to the car brand’s lower price range, which many car buyers may be looking for during this time of financial uncertainty. But don’t think that lower prices mean that they skimp on style; Hyundai has been releasing some fresh new redesigns of some of their most coveted models.
Tata Motors also had a better year in 2020, though “better” doesn’t mean “good.” While they lost more than $1.7 billion in 2020, they actually lost more than $4 billion in 2019, meaning that their profits increased (or rather, their losses decreased) more than 58% from 2019 to 2020.
- Hyundai Motor: 86.5%
- Tata Motors: 58.69%
- Kia Motors: 49.2%
- Volvo: 32.4%
- Toyota Motor: 12.4%
- Subaru: 10%
- Volkswagen: 8.5%
- Peugeot: 7.4%
- China Faw Group: 7%
Which Car Companies Had the Biggest Decreases in Profits From 2019 to 2020?
The effects of the difficulty of 2020 are easy to see across the auto industry. Through our research, we discovered that more of the best car brands saw a decrease in their profits than saw an increase between 2019 and 2020. Ford Motor had the largest decrease in profit between the two years, as their 2020 profits were nearly half that of the profits earned in 2019. Ford ended up with a profit of just $47 million for the year. Mazda Motor only fared slightly better during this turbulent year with a decrease in profits of 80.5%, having only made a profit of $112 million in 2020. Compare the biggest decreases in profits among some of the largest car companies in the world below.
The Car Companies With the Biggest Decreases in Profits From 2019 to 2020
- Ford Motor: -98.7%
- Mazda Motor: -80.5%
- Daimler: -68.9%
- Zhejiang Geely Holding Group: -37.4%
- Guangzhou Automobile Industry Group (GAC): -36.3%
- BMW: -34.5%
- Beijing Automotive Group (BAIC): -32.0%
- SAIC Motor: -31.9%
- Honda Motor: -23.8%
- Suzuki Motor: -23.4%
How Did the Pandemic Affect the Auto Industry?
As you can see from our research findings, the pandemic played a large part in how well major auto manufacturers fared in 2020, especially when compared to the prior year. One major reason the auto industry was so badly affected by the pandemic is that the beginning of the pandemic caused a lot of businesses, car manufacturers included, to shut down to slow the spread of COVID-19. With automakers shut down for weeks or months, new car production came to a screeching halt. When auto manufacturers were able to start producing cars again, it was with a much smaller workforce due to new pandemic safety regulations, which also affected the rate at which new cars would start to hit the market again.
In addition to the staffing shortages and a reduced number of cars being built, the auto industry’s profits were hit by supply issues. Demand for electronics surged as many people needed to buy laptops and servers to work or attend school from home. This increased demand led to a global chip shortage and ultimately had a huge effect on the auto industry, as the chips that are needed for a new car’s high-tech features weren’t available. To add another blow for carmakers and their consumers, a dramatic increase in steel prices has driven up the cost of car production and ultimately the cost of a new car; luxury vehicles and recreational vehicles have also been impacted. While these factors have had a negative effect on the new car market, the used car industry has been booming: People want to be in their own personal bubble while commuting instead of using public transit, and they’re paying top dollar for a used car to get that piece of mind.
Which Major Car Companies Were the Most (and Least) Profitable in 2020?
|Rank||Car Company||2020 Revenue (in Billions)||2020 Profits (in Billions)||Change in Profits From 2019|
|9||China FAW Group||$89.42||$2.85||7.00%|
|16||Zhejiang Geely Holding Group||$47.89||$1.232||-37.40%|
|18||Beijing Automotive Group (BAIC)||$72.55||$0.75||-32.00%|
|17||Guangzhou Automobile Industry Group (GAC)||$53.66||$0.565||-36.30%|
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