Major Car Manufacturers Face Sales Decline in China Amid Rising Local Competition

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Leading automobile manufacturers Porsche and BMW have reported significant declines in their sales in China, highlighting the growing challenge from domestic electric vehicle (EV) makers. Porsche's sales dropped by 28% and BMW by 13.4% in 2024 compared to the previous year. The downturn in the world's largest auto market has contributed to a 3% decline in Porsche’s global deliveries, despite positive growth in other regions.

This trend is not limited to German automakers. Volkswagen, Toyota, and Honda have also faced declines, with Volkswagen experiencing an 8.3% drop in China sales and Mercedes reporting a 7% decline. The tough competition stems from local companies such as BYD and Xiaomi, which are rapidly expanding their offerings, including low-cost and luxury EVs, directly competing with established brands.

In light of these challenges, Porsche and BMW have been reevaluating their investments in China. General Motors has announced a projected loss of over $5 billion related to its Chinese operations, prompting factory closures and cost-cutting measures. Meanwhile, Volkswagen is forging partnerships with local firms, including an agreement with the EV maker Xpeng to develop a network of fast-charging stations.

The landscape in China, once favorable to foreign manufacturers, is changing rapidly as domestic competitors capture more market share.

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