A sudden change in favor of a Chinese car instead of a Porsche… We are in an unprecedented crisis

“Volkswagen, BMW, and Mercedes are pushed out by Chinese electric vehicles.”
Inexpensive products such as China’s BYD, Nio, Xiaofeng, etc.
Germany’s ‘Big 3’ sales plummet in the third quarter

BYD exhibition booth at the Paris Motor Show, France on the 14th (local time). /Photo=XINHUA Analysis has shown that German automobile manufacturers are facing serious difficulties in the Chinese market.

According to a report by Bloomberg on the 15th, German automakers such as Volkswagen, BMW, and Mercedes-Benz have recently been experiencing a sharp decline in sales in the Chinese market, unlike in the past when they captured the hearts of Chinese consumers with performance and quality. This is because we cannot respond quickly to the electric vehicle era.

Bloomberg said, “German car manufacturers are facing a big challenge in the Chinese market,” and “As Chinese consumers are switching from internal combustion engine vehicles to electric vehicles, they are feeling the lack of technology in German brand cars.”

The media cited the case of Ryan Xu, a businessman living in Guangdong, and said, “Xu, who owned a Porsche 911 and a Mercedes-Benz G-Class, purchased an electric car, the Porsche Taycan, but was disappointed by the low-quality software and recently quit Chinese brand Nio. “It was replaced with the electric vehicle ET5,” the report said.

Xu assessed through Bloomberg, “German brands are lagging behind in the electric vehicle era and are less competitive than local Chinese brands in terms of technological innovation.”

Bloomberg also pointed out that this evaluation is not just a personal experience, but a change occurring throughout China. It is pointed out that German car manufacturers still occupy a large share of the Chinese market, but are losing out to local competitors in the electric vehicle sector.

According to Bloomberg, sales of Volkswagen, Mercedes-Benz, and BMW in the Chinese market fell 15%, 13%, and 30%, respectively, in the third quarter. In particular, Porsche’s decline in sales in China halved global sales of the Taycan during this period. The media reported that Porsche’s third quarter sales in China plunged 19% and said, “This is the worst third quarter performance in Porsche’s 10-year history.”

German manufacturers continue to invest in the Chinese market, but their current share of the electric vehicle market has fallen to less than 10%. The media analyzed that the reason they are experiencing a decrease in sales in the Chinese market, which they have dominated for a long time, is due to the competitive advantage of local brands in the electric vehicle sector and the influence of global competitors such as Tesla.

Bloomberg explained, “Chinese consumers now value factors such as technological innovation, software, and infotainment systems rather than performance,” and added, “German brands are lagging behind the competition because they are slow to respond.” It was also cited as an example that local electric vehicle manufacturers such as BYD, Nio, and Xpeng are dominating the market with inexpensive products.

German automakers are also preparing countermeasures such as strengthening localization strategies and improving technology by collaborating with partners in China, but the media assessed that this is not enough to meet the expectations of Chinese consumers. Moreover, as the Chinese government supports its own companies and encourages technological development, it is predicted that the position of German companies will be further narrowed.

Accordingly, Bloomberg said, “If German automakers do not follow up with their localization strategies and technological innovations, it is likely to lead to a greater decline in market share and worsening profits,” and added, “It is an important time for German brands to make strategic decisions about how to change in line with the electric vehicle era.” “He pointed out.

Kim Young-ri, Hankyung.com reporter smartkim@hankyung.com