The Chinese are buying less and less German cars and are turning to domestic brands

For years, German automakers have relied on success in China to generate big profits and boost growth. But that is now changing, with well-known Western brands struggling to retain the interest of Chinese buyers as they grapple with shrinking market share and bleak sales forecasts.

Sales data in the last quarter, in fact, paint a dark picture. BMW’s sales in China fell by 30 percent, Porsche’s by 19 percent, Volkswagen’s by 15 percent, and Mercedes’ deliveries fell by 13 percent. It’s not that Chinese drivers don’t want to buy cars. They simply buy less German cars, preferring to spend their money on newer, technologically advanced and most importantly, more affordable alternatives from the rapidly improving Chinese automakers.

Although German cars still account for 15 percent of sales in China, their share is falling, and fast. Before the pandemic, they had 25 percent of the cake, reports Bloomberg. And when it comes to electric vehicles, a sector that is far larger in China than in the US or Europe, Volkswagen, Porsche, BMW and Mercedes lag even further. Although all four brands offer electric cars, their models occupy only 10 percent of the market.

Chinese buyers who have switched from German brands say the domestic cars are better built and have more features. They are also significantly cheaper to buy, and offer similar or in some cases far superior performance to European models. That’s a blow that no amount of slick marketing campaigns or slick PR can easily fix.

Competing with BYD, Xpeng and Nio seems like an impossible task, but the German brands have no alternative, says Bloomberg. The European and American markets offer no further potential for growth, and some of the automakers have invested too much in production facilities to pull back even if they wanted to.

The Germans are thus now establishing relationships with Chinese companies that can help make their electric vehicles better and develop new products just for China that are cheaper to make and buy.

Prepared by: Ivan Mitić – Autoblog.rs