A state of shock in the German economy: two car giants are recording huge losses

Less demand and stiff competition from China impact on quarterly sales of BMW and Mercedesthe German luxury car manufacturers announced on Thursday.

The German auto sector faces a number of problems, from high production costs to reduced demand for electric vehicles (EVs) and strong competition from China, the world’s largest car market.

In the third quarter of 2024, sales of BMW and Mercedes fell 13% and 3%, respectively, reports Reuters, according to Agerpres.

On the Chinese market, BMW’s deliveries fell by a third, and those of Mercedes by 13%.

Mercedes also reported a 31% decline in battery electric vehicle (BEV) sales worldwide, while BMW posted a 10% improvement in the segment in the third quarter of 2024.

EU tariffs on Chinese cars

The EU recently decided to impose additional taxes on electric vehicles made in China, saying they benefit from unfair state subsidies. Beijing has denied it and threatened retaliation, while German carmakers, which make about a third of their profits in China, have called for more negotiations.

In September, BMW and Mercedes lowered their annual sales forecasts, citing a slowdown in the Chinese market.

On the Frankfurt Stock Exchange, BMW and Mercedes shares are down 23% and 9% respectively so far this year, while the pan-European auto index is down 13%.