{
  "id": 10598948,
  "title": "Global Automakers’ Operating Profits Plunge 63%",
  "url": "https://urgent.news/2026/09/29/global-automakers-operating-profits-plunge-63",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-29T03:38:53.000Z",
  "source": {
    "name": "BusinessKorea",
    "slug": "businesskorea",
    "url": "https://www.businesskorea.co.kr/news/articleView.html?idxno=277820"
  },
  "original_language": "en",
  "account": "The global automobile industry is witnessing a sharp decline in operating profits, with a staggering 63% plunge, according to a recent report by the Korea Automobile Technology Institute. Despite a slight increase in revenue, the operating profit margin has plummeted from 7.9% to a mere 2.3%, signaling a significant erosion in profitability across the sector. This downward trend is primarily attributed to the industry's heavy investment in electric vehicles (EVs), advanced driver assistance systems (ADAS), and artificial intelligence (AI) development, coupled with the transition from internal combustion engines to cleaner technologies. The report highlights that producing an EV platform or upgrading battery infrastructure can cost up to $400 million per model, with a development timeline often exceeding a year. Moreover, the software-defined vehicle (SDV) and AI initiatives, while promising, have yet to yield substantial revenue, with only 6% of Western automakers monetizing even half of their SDV features. Meanwhile, aggressive expansion by Chinese automakers, such as BYD, is exacerbating competition, with their market share in Europe reaching 11%, nearly quadrupling from the previous year. However, Chinese firms are pursuing a strategy of expanding market share while accepting meager profit margins of 2% to 4%. Tariff policies in the United States and Europe are also contributing to cost pressures, as automakers are now forced to maintain separate supply chains for each region, increasing their fixed costs. Industry experts advise that the focus should shift from recovering past profitability levels to enhancing the ability to translate future investments into actual sales and profits, emphasizing the need for joint development, standardization, and flexible production systems to adapt to changing demand patterns.",
  "summary": "A growing trend of “selling more but keeping less” is becoming increasingly evident in the global automotive market. While vehicle sales and revenue have edged upward, profits have fallen to less than half their previous levels amid heavy investment in future technologies and intensifying global com",
  "key_points": [
    "Global automakers' operating profits plunge 63%, from 7.9% to 2.3%",
    "Heavy investment in EVs, ADAS, AI driving profitability decline",
    "Chinese automakers' aggressive expansion and tariff policies exacerbate competition"
  ],
  "editors_take": "The plunge in operating profits signals a shift in the industry's priorities from recovering past profitability to translating future investments in EVs, ADAS, and AI into actual sales and profits.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}