The largest car market in the world is gaining momentum again and yet the German car manufacturers are losing market share. According to industry expert Ferdinand Dudenhöffer from the Duisburg Center Automotive Research (CAR), China is once again the “locomotive” for the entire industry. Although global car sales are expected to fall 3.2 percent this year, the Chinese market is expected to grow by 5 percent, he estimates.
China is again the driving force on the world market. “While the car market in the USA was confronted with a slump of 18 percent in the first half of 2022 and the EU had to digest a 14 percent decline, China was able to increase its new car sales by four percent in the first six months,” Dudenhöffer noted. With the surge this year, China is “saving the world auto market from a major slump.” China’s share is expected to rise to 32.1 percent.
Nevertheless, sales by German manufacturers in their most important market collapsed in the first half of the year. The VW Group recorded a minus of 20 percent compared to the same period last year. Mercedes and BMW each sold 19 percent less. As a result, VW’s market share in China fell from 18.4 to 14.2 percent. The analysis showed that it fell from 4.4 to 3.4 percent for Mercedes and from 4.7 to 3.7 percent for BMW.
“The winners are clearly the Chinese and Tesla,” said Dudenhöffer. An important reason for this is their electric cars. “The German car manufacturers in China are still having a hard time there.” The same applies to software functions in premium vehicles. Another reason why German car manufacturers are lagging behind is the poorer purchasing and production systems, which is also evident in comparison to the competitor Toyota.
Against the background of the growing importance of the Chinese market, Dudenhöffer was critical of the discussion in Germany about excessive dependency and a possible decoupling from China. “We should consider whether we really want to “sacrifice” our industry and turn away from China,” said Dudenhöffer. “It would be an industrial loss that is irreversible.”
After corona lockdowns and a lack of chips had long weighed on sales in China, the Chinese car market took off in July with an increase of almost 30 percent compared to the same month last year. The manufacturers sold a total of 2.42 million vehicles, as reported by the manufacturer association CAM (China Association of Automobile Manufacturers). For passenger cars and smaller multi-purpose vehicles, there was even an increase of 40 percent. Sales of electric cars more than doubled to 593,000 in July.