Recently released reports by the renowned German sports car manufacturer Porsche AG have revealed the significant impact of the ongoing softness in the Chinese market on the company. In 2024, Porsche saw a substantial 28% decrease in sales in China. Similarly, Japanese car companies also experienced a downturn in sales in China, with Honda’s sales dropping by 30.9%.
Porsche, under the Volkswagen Group, sold 56,887 cars in China in 2024, compared to 79,283 in 2023. The decline in Chinese market sales greatly pressured Porsche’s global sales, which decreased by 3% to 310,718 cars compared to 2023.
The real estate crisis has led to slow economic growth in China, causing Chinese consumers to become increasingly reluctant to spend money on luxury goods.
Detlev von Platen, a member of the Porsche board, stated in a release, “Overall, we showed extremely robust performance in the challenging market environment of 2024.”
In response to the persistently weak demand, Porsche announced plans in October last year to reduce its dealer network in China.
Other German car manufacturers also faced challenges in China due to the continued sluggish Chinese economy. Mercedes-Benz reported a 7% decline in core car sales in 2024, with a drop of 8.3% in China. Volkswagen’s brand also saw an 8.3% decrease in sales in China to 2.2 million cars.
BMW reported a 2.3% decrease in total sales of its brand cars last year. Its sales in China and Germany declined by 13.4% and 5.3%, respectively.
Audi, under VW, saw an 11% drop in sales in China last year.
Not only German car companies, but Japanese car companies also experienced significant declines in sales in China. These manufacturers continue to face pricing competition from Chinese brands like BYD.
Honda’s car sales in China dropped by 30.9% to 852,269 units last year; Nissan’s sales fell by 12.2% to 696,631 units; Toyota’s sales in China decreased by 6.9% to 1.776 million units. This marks the third consecutive year of declining sales for these three companies.
On December 23, 2024, Honda and Nissan announced discussions on a merger in 2026, marking a historic turning point in the Japanese automotive industry and highlighting the threat Chinese electric car manufacturers pose to Japanese companies.
Both Honda and Nissan have been working on reducing production and optimizing personnel in China since last year. Honda closed a factory with an annual production capacity of 50,000 vehicles in Guangzhou last October and suspended operations at a Wuhan plant with an annual capacity of 240,000 vehicles in November.
(Adapted from reports by Reuters and Nikkei News)