Home business German car manufacturers brace themselves in China against downward trend

German car manufacturers brace themselves in China against downward trend

Almost every fourth car sold in China comes from a German manufacturer. This makes BMW, Daimler and Volkswagen in particular dependent on a market in which the uncertainty will increase in 2019.

German car manufacturers have gained market share last year in the weakening Chinese car market. The three German car companies Volkswagen, BMW and Daimler sold a good 5.5 million cars in China in 2018, according to an analysis by the consultancy firm Ernst & Young, which was released on Sunday. While the Chinese car market shrank by four percent – for the first time in 20 years – German manufacturers were able to achieve a total of two percent and achieved a market share of just under 24 percent.

German car manufacturer highly dependent on the Chinese market

This increases the dependence of Germans on the Chinese market. More than any third car that Volkswagen, BMW and Daimler sold in 2018, went to the Chinese. At Volkswagen the dependency is greatest: Europe's largest car manufacturer sells about 40 percent of its vehicles in China – the most recent being 4.2 million. For example, the Wolfsburg alone has a market share of 18.1 percent in the market.

The trade dispute between the US and China is at risk

It is not certain how it goes there. "It is currently unclear whether the decline in sales will continue or whether the market will recover", says Ernst & Young partner Peter Fuß. Much depends on the trade dispute between the US and China. A protracted period of weakness will be prevented by fuss, but by the Chinese government.

"The Chinese government has already intervened in earlier weak periods, including tax incentives, to give the new car market a boost," he says. He sees more signs that there may be another billions of dollars of economic stimulus packages, which the car market should also benefit from.

The times of unbridled growth are over. According to EY calculations, motorization in China is still far from German standards. There were 14.5 cars for every 100 inhabitants – 56.1 in Germany. The question should therefore remain.

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