German luxury carmakers suffer sales decline in China amid rise of local rivals (Hongwei FAN – Unsplash)
German luxury carmakers are facing major challenges in the Chinese market. In the first quarter of 2025, Porsche, Mercedes-Benz, and BMW reported significant sales drops, with Porsche being the most affected, suffering a 42% decline compared to the same period in 2024.
The company attributes this decline to China’s unstable economy and a strategy focused on more balanced sales. Meanwhile, Mercedes saw a 10% drop in deliveries, although it remains the leader among models priced over 1 million yuan, while BMW also experienced a 17.2% sales decline, keeping China as its main market despite the drop.
All three brands have been trying to adapt their products to Chinese consumer preferences, with versions of elongated sedans and SUVs with longer wheelbases. Even so, their efforts have not been enough to reverse the market share loss.
In addition, the growth of local competitors, offering modern, high-tech, and much more affordable cars, is putting pressure on traditional manufacturers, who are now scrambling to adapt to the new reality—especially in the electric vehicle sector, where Chinese brands lead both in innovation and production costs.
Western brands’ response includes measures such as launching sub-brands tailored to the Chinese market, like Jetta by Volkswagen and AUDI (a new division of Audi), as well as job cuts at companies like Mercedes, Porsche, and Audi. These actions highlight the challenges faced by traditional luxury brands, which need to reinvent themselves to remain relevant in an increasingly competitive market dominated by fast-rising local manufacturers.
Source: Motor1.com | Photo: Unsplash | This content was created with the help of AI and reviewed by the editorial team
