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Ferrari makes even more money in 2023

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One thing is to sell cars and lead the volume rankings and a different one is to make money by selling cars. To be popular does not necessarily mean to make money. And there are two brands in the automotive industry that know this perfectly. Ferrari and Porsche, two of the most iconic car brands recorded the highest margins in 2023 despite being at the bottom of the volume ranking for the year.
The latest analysis of the financial results published by the majority of the Western car makers (those coming from Europe, USA, Japan, and Korea) and two Chinese OEMs indicate that the industry had a very good year in terms of revenue and profits. The data collected for 24 OEMs indicates that the revenue (or the money obtained from selling cars and other activities) increased by 11% to 2.25 trillion euro.
The increase in revenue is mainly explained not by the increase on units sold (+9%), but by higher prices of cars. The Volkswagen group, Toyota and Stellantis posted the highest revenue, with increases of 15%, 11%, and 6%, respectively. Basically, all the 24 OEMs in scope registered increases, with the exception of Isuzu, whose revenues remained stable. 
The ranking changes dramatically when looking at the profitability of these companies. In 2023, they all combined made 187.8 billion euros in operating profits (the money they earned after paying the expenses needed to operate). This total was up by 18% compared to 2022 when the same OEMs posted a total of 159.4 billion euros. The increase of 18% is then higher than the growth posted by the revenues, meaning that the industry’s margin jumped from 7.8% in 2022 to 8.4% in 2023.
The leader continued to be Ferrari. This Italian company is not only one the referent for sports cars around the world, but a real money maker. Ferrari shipped 13,663 cars in 2023, with total revenues of 5.97 billion euro, up by 3.3% and 17% respectively. It means that the company was able to sell more expensive cars than before and make more money from other activities like the F1, merchandising, etc.
The operating profits of Ferrari totaled 1.61 billion euro, representing 27% of total revenue. This is a massive operating margin that confirms the solid position of Ferrari in the industry. In other words, Ferrari kept 27 cents of every euro in sales. Last year, this proportion was 24%. No other car maker gets close to this brilliant results.
The introduction of the expensive Ferrari Purosangue boosted its profits per unit shipped. According to its official financial results, this brand gained almost 118,000 euro per car shipped in 2023, or 25,600 euro more than what it earned in 2022. This is a massive quantity of money that goes into the pockets of Ferrari and allows it to keep leading in the super luxury segment. To give you an idea, Porsche, the second most profitable carmaker in 2023, needed to sell 5 of its cars to equal the profits generated by one Ferrari sold. 
The other winner of the year is Porsche with its 7.28 billion euros in profits out of 40.53 billion euros in revenue. Its operating margin remained stable at 18%, which is the second highest after Ferrari. A big part of the profitability at Porsche is explained by the good results of its flagship 911, which posted the highest sales growth in 2023. Meanwhile its three SUVs made up 55% of t he global volumes.
In terms of profits per units delivered, Porsche made 22,800 euro last year, the second highest in the ranking. Although it is an excellent result, it is clearly behind Ferrari’s total, and could be one of the reasons why the latter refuses to be tempted from higher volumes. Ferrari with lower volumes and higher prices makes more money/unit than Porsche.
JLR posted the best improvement in operating margin between 2022 and 2023. The arrival of the new generations Range Rover and Range Rover Sport, along with the solid results of the Defender, allowed this troubled carmaker to jump from loses in 2022 (-1.9% operating margin) to profits in 2023 (11.0%). Nevertheless, JLR still needs to address several issues related to the positioning of its brands and their future. 
Toyota (which includes Lexus, Daihatsu, and Hino) saw the second highest operating margin increase behind JLR. The Japanese carmaker is the world’s biggest by units sold and the most global one in terms of presence by markets. It is also interesting to note that Toyota is one of the very few big OEMs to avoid taking big steps towards the development of fully electric vehicles. Last year, the BEVs made up just 0.9% of its global sales. Is this reason for its profitability?
Aston Martin was the other winner of the year. Although it continued to post negative results, it lost less compared to 2022. Its loses per unit sold decreased from 24,900 euro in 2022 to 19,400 euro last year. Interestingly, the improvement was not driven by its only SUV, the DBX/DBX 707, but by its sport/GT lineup, as their sales decreased by 9% in the case of the SUV, and increased by 14% in the case of the sports cars.
Tesla is at the bottom of the operating margin variation between 2022 and 2023. The brand dedicated a big part of the year to cut prices to keep its volume sales growth and its factories in USA, Germany, and China. In fact, these price cuts allowed Tesla to register a new sales record of more than 1.8 million cars delivered, at the expense of fewer profits. 
The company’s operating profits fell from 12.72 billion euro in 2022 to 8.05 billion euro in 2023. In contrast, its revenue increased by 15%, while the units delivered soared by 38%. In other words, Tesla sold more cars at a lower price, and got more operation costs coming from its expansion plans. Its operating margin dropped by 7.6 points to 9.2%.
I managed to gather the financial results for only two Chinese OEMs: BYD and Great Wall Motors (GWM). As the majority of these carmakers produce cars for foreign firms (Dongfeng to Nissan, Kia, Peugeot; SAIC to Volkswagen, GM; FAW to Toyota; Beijing to Hyundai) it is hard to split the results by their own brands and their partners. Others like Xpeng, NIO, Geely, have not yet published anything. 
Nevertheless, BYD is China’s biggest EV maker and GWM is also expanding fast in overseas markets. Both of them are a good example of what China’s priority is nowadays: volumes. They want to expand their business outside China, meaning that they need to establish themselves around the world through new distribution and service networks, and new factories to localize their production. All of this means higher operating expenses, and lower profits. 
BYD sold 62% more cars in 2023 than in 2022, and it actually hit the world’s top 10 by brands. Consequently, its revenues increased by 34% to 76.8 billion euro. However, the company only managed to earn 4.8 billion euro, or 6.3% of the revenue. Although these are positive results, the margin is quite far from some of its Western peers. While BYD made 1,600 euro per unit sold in 2023, a group like Stellantis earned 2,000 euro more per unit. GWM is another example. Its margin fell from 4.8% in 2022 to 1.6% last year.
Source: OEMs financial results. 
Note: all data in euro using 31/12/2023 exchange rates.

One thing is to sell cars and lead the volume rankings and a different one is to make money by selling cars. To be popular does not necessarily mean to make money. And there are two brands in the automotive industry that know this perfectly. Ferrari and Porsche, two of the most iconic car brands recorded the highest margins in 2023 despite being at the bottom of the volume ranking for the year.
The latest analysis of the financial results published by the majority of the Western car makers (those coming from Europe, USA, Japan, and Korea) and two Chinese OEMs indicate that the industry had...

Ferrari makes even more money in 2023

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