Germany's automakers hit hard by falling China sales, profits

Volkswagen’s China deliveries fell 36.6% in the second quarter to 424,300 vehicles, a drop that helped push the group’s global deliveries down 8.6% to 2.077 million, the steepest quarterly decline in four years. The slide hit every major German auto name, with Mercedes-Benz, BMW and Porsche also posting sharp losses in China as local competitors kept gaining ground.

Mercedes-Benz car deliveries fell 8% to 417,800 in the quarter, while China sales slid 30% to 98,600. BMW deliveries declined 4.9% to about 590,962, and BMW and MINI sales in China fell 20.4% through June. Porsche deliveries dropped 16% in the first half to 122,306, after limited product availability and the end of U.S. EV tax incentives hit the company.

Passenger-car retail sales in China were down roughly 20% to 24% in the first half, and June retail sales were off about 21% to 23% from a year earlier. Volkswagen sales executive Marco Schubert said the group could not avoid a total market decline of around 20% in China in the first half.

Volkswagen will cut its model lineup by up to half after the latest declines, and labour representatives blocked a broader restructuring plan from CEO Oliver Blume the day before the delivery figures were published. BYD’s special adviser for Europe, Alfredo Altavilla, called those cost cuts a “wake-up call” for the European automotive industry, while the Chinese automaker is close to deciding on taking over an existing European plant.