Korean media: "The glory of the past is gone," German cars suffer sharp decline in Chinese market!
On August 10, South Korean media outlet Global Economy published an article stating that Germany's automotive industry is struggling in China—the world's largest car market—and that its former glory has vanished. With domestic brands launching fierce attacks, sales of German premium brands have experienced historic declines.
According to Reuters, in the second quarter of 2026, major German automakers such as Volkswagen, Mercedes-Benz, BMW, and Porsche saw their sales in China drop by 30% to 41% year-on-year.
The poor performance in the second quarter indicates that the profitability model of German automakers reliant on the Chinese market has hit fundamental limitations. Specifically, Volkswagen Group sold 424,300 vehicles in China during the quarter, a 36.6% decrease compared to the same period last year.
During the same period, Mercedes-Benz and BMW both saw sales in China fall by approximately 30%, while Porsche’s sales declined by as much as 41%.
This massive drop is sufficient to offset part of their sales growth in Europe and the Americas. Notably, Volkswagen Group suffered severe setbacks—its global total deliveries dropped by 8.6% due to the decline in performance in the Chinese market.
Experts believe that as China accelerates its transition toward electric vehicles (EVs), the German automakers’ strategy centered on internal combustion engines (ICE) has revealed its inherent limitations, leading to a structural weakening of foreign brands’ competitiveness.
The sluggish sales of German automakers in China are now exerting significant downward pressure on South Korea’s automotive parts industry. This is because declining performance by German firms has led to reduced production utilization rates at their manufacturing facilities in China, directly resulting in lower exports from South Korean parts suppliers to Germany.
It is expected that South Korean companies—especially those specializing in ICE powertrains and transmission components—will be hit the hardest. As German firms completely restructure their supply chains to accelerate their shift toward EVs, the risk of destabilizing existing partnerships is increasing.
South Korean industry insiders predict, “German companies will increase reliance on local Chinese parts suppliers or intensify price-cutting pressures to reduce costs,” and assess that South Korean firms must urgently restructure their supply chains—from simple ICE components to core EV components such as battery management systems and thermal management systems.
Although German brands still possess strong technological advantages in internal combustion engine vehicles, it is widely acknowledged that they lag behind domestic brands like BYD, Geely, Changan, and Chery in terms of pricing and software competitiveness in the electric vehicle sector—where EVs currently dominate the Chinese market.
Some analysts argue that as Chinese consumers increasingly favor domestic brands, foreign automakers must go all out across every front to retain their market share.
For German automakers, China is no longer the “global profit source” but rather a “testing ground for strategic restructuring.”
Looking ahead, the key factor shaping the global automotive industry landscape is expected to be how precisely German auto groups refine their localization strategies in China—and whether they can rapidly close the technological gap with domestic brands in the electric vehicle sector.
Original source: toutiao.com/article/1873099677461516/
Disclaimer: The views expressed in this article are solely those of the author.