Source: Bloomberg
Author: chunying zhang, William Wilkes
Ryan XU is a customer who yearn for German car manufacturers.The entrepreneur and her husband from Guangdong have a Porsche 911, a Mercedes-Benz G-Class, and one of the first buyers of Porsche electric car Taycan.
But today's consumers are increasingly favored by traditional selling points such as horsepower and handling, and her views on German cars have changed.XU, 36, said with three children, said that the software system that cost far more than $ 100,000 -is very poor; it is just a power -driven Porsche, that's all.
This is not an example.As the Chinese slowly abandon internal combustion engine cars, it is difficult for Volkswagen, Mercedes-Benz and BMW to take out attractive electric vehicles in their largest and most profitable markets, making it 35 billion euros ($ 38 billion)Investment is facing danger.
The latest warning signal appeared last week, and these three German car companies all announced the decline in sales in China in the third quarter.BMW's sales in China have decreased by 30%, the maximum decline in more than four years; Mercedes' sales have decreased by 13%, and expensive models, including S -Class and Maybach luxury cars.
When Taycan's global sales were almost halved, Porsche's sales in China fell 19%in the third quarter, the lowest in the same period in ten years.Volkswagen -Porsche and Audi's parent companies -sales in China fell 15%.Marco Schubert, the person in charge of Volkswagen Sales, said that China's competition situation is particularly fierce.
During the period of calling the male fuel vehicle, many years later, German manufacturers were too complacent. They underestimated the threat brought by new competitors and did not want to give up the profits brought by the large engine cars.This has led Tesla and Chinese local automakers headed by BYD to the rapid development of advanced technology and affordable plug -in hybrid vehicles, so that China no longer needs or want them anymore.
Stephen Dyer, managing director of the consulting company AlixPartners in Shanghai, said the inflection point of German automakers is appearing."They need to change the market strategy thoroughly."
The next challenge has arrived at the Paris Motor Show this week.Enterprises including BYD and Xiaopeng Automobile will show their latest technology at this largest European auto show this year.
At least one trick in "returning" in German car companies has not been good.In the process of Volkswagen's future electric vehicle, microphone and slides were interrupted for a few minutes, making the sales and marketing director Martin Sander frustrated.
Many drivers in China have the same sense.After encountering braking and other quality problems, the XU family sold Taycan and bought an ET5 from the Chinese brand Weilai.XU also considers Mercedes EQE, but the ET5 is about one -third cheaper, and the interior is more luxurious, and the voice control runs smoothly. Even when they get on the car, they will call the child's name and greet them.
XU, who runs a company with her husband, said that German cars do not have this technical level.Mercedes -Benz, BMW, and Audi "difficult to be regarded as luxury cars now."
Although German car companies still have nearly 15%of China's market share -this is also lower than one -quarter before the epidemic, but the worse is that their electric vehicle market share is less than 10%.If it cannot be quickly reversed, the landslide may evolve into a defeat and the German giants fall into the battle of survival.In fact, the market value of Volkswagen, Mercedes and BMW is only about half of BYD.
Compared with other international counterparts, German car companies have regained their bets in the Chinese market.Some competitors have taken stop loss measures, but the Germans did not give up, but mobilized more resources to work hard to regain market share.But when the Chinese government is actively seeking to develop local enterprises, this seems to be a hardship.
Volkswagen plans to fight for a long time.His spokesman said that the price war in the Chinese automobile market was very fierce, and the company would not use sacrifice profitability to exchange market share.
The company plans to continue to implement the strategy of "in China, for China" to protect its long -term prospects.BMW and Mercedes also plan to adhere to the localization strategy to attract Chinese buyers.
The reason for double betting is self -evident.The European automobile market may have peaked, and the US market has been saturated. From the perspective of sales and profit levels, the Chinese market is irreplaceable.
In view of the huge business scale in China, this has caused concerns.As a whole, German car companies have more than 40 factories in China -more factories in Germany.The investment is too large and cannot be easily given up, which also explains why they oppose the EU tariffs on Chinese cheap electric vehicles.
It is almost unimaginable like GM and small Japanese brands Suzuki Motors and Mitsubishi Motors.And given that the relationship between these businesses and government entities is intricate, it is not easy to carry out any reorganization.This focuses on the function of developing Chinese customers.
The sense of urgency has intensified from the end of 2022.After Volkswagen's CEO of China, Bearing, after issuing a warning of the Chinese car company's progress to the Supervisory Board, the company dispatched hundreds of employees to the Shanghai Auto Show in April 2023, so that they could see it by themselves.
This is an awakening moment.German corporate executives are facing the rapidly launched cheap Chinese models, high -tech products, and intensified price wars.The sports car and car karaoke that can be jumped. A series of mighty fancy innovations and re -setting up Chinese consumers' requirements for car trends.
Since then, there have been fierce actions in response to competition.A few weeks after the auto show, Oliver Blume, CEO of Volkswagen, replaced the head of the software subsidiary Cariad to further accelerate development and improve technology.In addition to finding new Chinese partners in terms of autonomous driving, information entertainment and user experience, Volkswagen also invested in Xiaopeng Automobile, headquartered in Guangzhou to support the use of the latter's plan to produce cars by electric vehicles to produce cars.
After a profit warning of profit in September, CEO of Mercedes flew to China immediately to investigate the development of business in China, including cooperation with the Ningde Times and Digital Services in terms of batteries.BMW work with Great Wall Motors to produce electric vehicles for its MINI brand.
In this way, German cars will gradually go to Germany in their largest market.Rhodium Group analyst Gregor Sebastian said that the expansion also runs counter to the government's reduction in risk exposure in China.
It is a gambler in China to invest in China, "he said, and pointed out that if it fails, the German government may need to reach out."They are expecting themselves so much that they can't fall."
