Key facts
- German automakers Audi, BMW, Mercedes-Benz, and Volkswagen reported significant declines in Q2 China deliveries.
- Volkswagen saw a 36.6% drop in China sales in Q2, while BMW's fell 30.2% and Mercedes-Benz's also dropped.
- Global delivery declines for the German brands in Q2 included 8.6% for Volkswagen, 4.9% for BMW, and 8% for Mercedes-Benz.
- Volkswagen plans to halve its vehicle model lineup in response to falling sales and competition from Chinese EV makers.
- Analysts attribute the sales slump to Chinese consumers favoring local, tech-savvy EV brands over traditional combustion engine heritage.
German automakers Volkswagen, BMW, and Mercedes-Benz have experienced sharp declines in vehicle deliveries in China during the second quarter, a trend attributed to intense competition from local electric vehicle manufacturers and a broader market slowdown. Volkswagen reported a 36.6% year-on-year drop in China sales for the April-June period, the steepest decline among the German brands. BMW saw its China sales fall by 30.2%, while Mercedes-Benz also reported a significant drop. These downturns in the world's largest auto market have contributed to global delivery declines for the companies, with Volkswagen's global sales down 8.6% and BMW's down 4.9% in Q2. Audi also reported a 7% drop in global deliveries for the first half of the year, with nearly a 20% decrease in China. Analysts suggest that younger, tech-savvy Chinese consumers are increasingly favoring local EV brands over the traditional combustion engine heritage of German automakers. In response to these pressures, Volkswagen plans to reduce its vehicle model lineup by half. The challenging market conditions in China have led to BMW issuing its third profit warning related to the region in less than three years.