Luxury car maker Porsche sees sales plummet in China as competition increases

Automotive giants, such as porschecontinue to see their sales suffer in China, since competition increases considerably and consumers continue to shy away from big purchases, amid the current cost of living crisis.

Porsche sales in the third quarter recently fell to the lowest figure for this period in 10 years. Sales of the Taycan electric model plummeted by 47%, mainly due to the drop in demand for electric vehicles (EV) in Europe and the US, as well as problems specific to the Taycan model.

This includes the calls for review from the manufacturer in June and October of this year for problems with the brake hose and the battery module. From January to September of this year, the company delivered 43,280 vehicles in China, which represented a drop of 29% compared to the first nine months of 2023. Porsche delivered 61,471 vehicles in North America, too 5% less than in the same period of the previous year.

However, in Europe, despite the lower performance of the Taycan model, the company delivered 52,465 vehicles. This figure excluded Germany. But Detlev von Platen, a spokesman for Porsche AG, remained optimistic.

In a statement, it said: “Customer demand remains at a robust level and feedback from our customers on the new models is very good. As product availability increases, we are optimistic about the final stretch for 2024“.

“Market environment remains difficult around the world. However, with the youngest model range in the company’s history and a sales structure that remains very balanced across sales regions, we are in a strong position. Our value-oriented sales strategy has proven effective and will continue to be the basis of our actions in the future.”

Volkswagenthe parent company of Porsche, also have faced a similar situationwith a sales drop of 15% in the third quarter of this year.

Marco Schubert, a senior Volkswagen executive, said in a statement: “After nine months, Volkswagen Group deliveries They are about three percent less than in the same period last year in a market environment that remains difficult.

“We grew significantly in North and South America and increased our market share. In Europe, we have been able to keep our vehicle deliveries to customers largely stable, but we are experiencing significant market headwinds.

“The competitive situation in China is especially intense, which is the main reason for the global decline in our deliveries. In the coming months, numerous attractive new models from all brands will strengthen our position in the global market. But also a better cost base, especially in Germany, is essential to continue to be successful in this environment in the future.”

Booming EV demand in China further hurts European automakers

Although the demand for EVs in Europe has slowed down considerablyespecially given the increase in import tariffs on Chinese EVs, in China the situation is very different.

The country’s domestic electric vehicle manufacturers, such as BYD and Geely, have experienced a notable increase in demandwhich has significantly affected the profits and sales of European car manufacturers in China.

This is mainly because Chinese electric vehicles are much cheaper than European ones since they respond to the demand for more ecological vehicles. In addition, they offer more features and more modern designs than European manufacturers.

The increasingly tense trade war between the EU and China It has also led several observers to speculate that the Chinese government may impose sanctions on European automakers with major production facilities in the country, such as BMW, Audi and Mercedes-Benz.

This has caused a greater number of customers to move away from these brands, which have seen their sales fall in Chinaforcing them to adapt accordingly and focus more on its offer of electric vehicles in the country.