The German luxury brands Mercedes and BMW reported reduced sales in the third quarter as a result of the tough competition in China and poor demand. The German auto sector is facing several challenges, including rising production costs, figuring out how to transition to electric cars, dwindling demand, and intensifying competition from China.
As a cost-cutting move, Volkswagen, the biggest automaker in Europe, has recently expressed interest in closing its operations in Germany for the first time. Mercedes’ sales dropped by 3% during the July–September quarter, while BMW’s fell by 13%.
The demand in China, the world’s largest auto market, has been negatively impacted by a faltering economy. Local manufacturers, with their more affordable models, especially electric vehicles, represent a severe challenge to multinational automakers.
In China, sales of Mercedes fell by 13 percent, while sales of BMW fell by 33 percent.
Mercedes also revealed a 31% drop in BEV sales, suggesting a lackluster demand for these cars around the world. BMW saw a 10% increase in BEV sales over the course of the quarter.
Recently, the European Union has imposed substantial tariffs on Chinese-made electric cars (EVs), claiming that the Chinese manufacturers had received illicit state subsidies. German manufacturers, who receive almost a third of their sales from China, have voiced concern and requested more talks, but Beijing rejects this and has threatened retaliation.
