The German car manufacturers rely on a comeback on their most important individual market in China. However, they have a difficult way to do. “The car company is never easy, but I think there was no higher complexity in the industry during my 32 years,” said Mercedes boss Ola Kälenius during the Sanghai car show launched on Wednesday.
Because the American trade conflict with the rest of the world of industry is now making life difficult for expensive switch to electric cars. On the Chinese Auto-Markt-De Cash-Cow of Volkswagen, Mercedes-Benz or BMW-De German car manufacturers are pushed further to the edge by domestic competition.
Germans sell up to 42 percent less
In the first quarter, car sales in China increased by a total of 12.5 percent. The two largest Chinese manufacturers BYD and GEYY registered growth. The German providers, on the other hand, reported a big minus at the start of the year: the VW group sold seven percent less. The daughter of the sports car, Porsche, suffered from the biggest break -with a minus of 42 percent, and fighting the third year in a row with sales loss in China. Mercedes-Benz experienced a decrease from ten percent from January to March at the same period last year, competitor BMW even 17 percent.
At the Trade Fair in Shanghai, the managers look for the silver stripe on the horizon and show future models, usually electric cars with which they want to return to the road to success. “The competition is still extremely high. But we are now seeing a saturation curve of innovation,” said VW -Baas Oliver Blume. “For the VW group this means: we clearly have more faith in what we have put on.” For example, an advantage is the large dealer network that smaller competitors did not have.
Luxury in China? Doubtful
With a view to Porsche, Blume said that it was not yet clear whether a luxury segment for electric cars would develop in China. In the next two or three years it will become clear whether Porsche will settle as an e-brand on the largest car market in the world. Porsche advertises with exclusive, tailor -made models for which customers can choose from more than 1000 options. In Shanghai the company showed a 911 Nostalgia model based on the 1970s, of which only 1500 has to be sold with a gasoline engine.
According to Auto -Expert Bo Yu of the research agency Jato Dynamics, the VW daughter has a big problem: “The concept of Porsche as a golden brand means nothing for the younger generations in China.” Porsche’s sister brand Audi now appears in China with a new “Audi” logo and omits the iconic four rings.
Mercedes sees momentum coming
“In the next two to three years, the momentum on the upper market segment will build itself up,” Mercedes -Baas Källenius, on the other hand, will certainly be. The brand with the star presented the “Vision V”, a provisional version of a super luxurious electric van. In his opinion, hybrid drives, ie combustion engines that are supported by an electric motor, will be long in addition to pure electric cars. Because Hybrids were trendy in China, it was like a plug-in hybrid or as a reach extension, where the electric motor and a small combustion engine only load the battery. The younger buyers who want to win Mercedes for his E-Modell CLA attached great importance to digital functions. But quality and timeless design also counted.
China Car Booms in China
From 2020 to 2024, the five largest foreign car manufacturers – VW, Toyota, Honda, GM and Nissan – registered a decrease in their car sales in China by 40 percent from 9.4 million to 5.7 million. This is the result of data from the Advice Office for Driving. The market share of the decades of the VW Spatial DOG VW fell from 19 percent last year to 14.5 percent in 2019. The five largest Chinese car manufacturers have had a turnover increase from 84 percent to 8.4 million units since 2020.
The foreign car manufacturers understood the challenge, said Yu Zhang, director of the Automotive Foresight, based in Shanghai. “But they still don’t move fast enough to solve the problem.” Andrew Fellows, car expert from Technolog Consultancy Star, expects that foreign car manufacturers will no longer reclaim the previous market shares. Tu Le, founder of the Sino Auto Insights consultancy, suspected that China was lost for Porsche.
Three things crucial in China
To survive in the competition in China, three things are crucial, explains Timo Möller, industrial specialist and partner of McKinsey. On the one hand, lower prices are needed due to falling costs. Then the brands should be strengthened because the customer loyalty of the Chinese rivals with the change in electric cars. “Managing a local brand is a national pride, as we are used to in Europe.” And the newest sub -driven Rijf functions are an important factor. Here he sees the Germans well positioned.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
