dream customer for Germany’s car makers. The Guangdong-based entrepreneur and her husband own a Porsche 911 and a Mercedes-Benz G-Class and were among the first buyers of the electric Porsche Taycan.
The latest warning signs came last week, when all three German manufacturers reported slumping third-quarter sales in China. BMW posted its steepest sales drop there in more than four years, a 30% plunge, and Mercedes’ deliveries declined 13% amid poor demand for its priciest cars, including S-Class and Maybach limousines.
At least one response effort didn’t go as planned. The microphone and slideshow cut out for several minutes in the midst of Volkswagen’s presentation about future electric vehicles, leaving sales and marketing chief Martin Sander visibly frustrated.against Europe’s plan to effectively ban the sale of combustion-engine cars from 2035, arguing it will lead to a “massive shrinking” of the region’s automotive industry.
While German car makers still control nearly 15% of the Chinese market, that’s down from a quarter before the pandemic and worse yet, their share of EVs is less than 10%. Without a quick turnaround, the slump risks turning into a rout and tipping Germany’s Big Three into an existential fight. As it is, VW, Mercedes and BMW are each only worth about half of BYD’s stock market value.
That raises concerns given their massive footprint in China. As a group, Germany’s car makers operate a network of over 40 factories — more than in their homeland. That’s too much investment to simply give up on — and explains why they oppose the EU’s plans to levy tariffs on China’s cheap electric cars.Pulling out of China — as smaller Japanese brands Suzuki and Mitsubishi have done — is almost unthinkable.
Clinging to their position in China is “a huge gamble”, he said, noting that the German state might need to bail them out if it all goes wrong. “They’re hoping they’re too big to fail.”