Major German carmakers, including Volkswagen, Mercedes-Benz, BMW, and Porsche, saw sharp quarterly sales declines in China as domestic demand weakened and competition heated up in the world’s biggest auto market. China sales for the April-June quarter plummeted between 30% and 41% compared with the same period a year ago, according to company data released over the past week.
Competition from Chinese Automakers
The falling China sales have squeezed their overall profits and in some cases offset gains from other regions. This also comes at a time when these legacy German carmakers are faced with intensified competition from Chinese automakers outside of China, including in Europe, as leading Chinese brands like BYD make inroads overseas.
Volkswagen group, for example, saw deliveries in China down 36.6% during the quarter to 424,300 vehicles, which dragged down its global sales to a 8.6% decline, even as deliveries increased in Europe and the Americas. The Wolfsburg, Germany-based auto group, which has been betting big on the Chinese market, said it would be slashing its model lineup by up to half after the latest sales declines.
China’s prolonged property sector downturn and an economic slowdown have hurt consumer sentiment, with more people shunning big-ticket purchases. Strong competition in its domestic car market and a yearslong fierce price war have also hit many European carmakers, with drivers opting for affordable Chinese car brands.
Original reporting: KTBS 3 (Shreveport) — read the source article.
