Oct 10, 2024 06:05 PM IST
BMW and Mercedes-Benz saw car sales slump in China in the third quarter as weak consumer sentiment in their biggest market weighed on luxury spending
BMW AG and Mercedes-Benz Group AG saw car sales slump in China in the third quarter as weak consumer sentiment in their biggest market weighed on luxury spending.
Deliveries of BMW and Mini-branded cars fell 30%, the steepest drop in more than four years. Mercedes sales dropped 13% in the period, with expensive models such as the S-Class and Maybach sedans driving the decline.
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The developments, along with slowing growth for electric vehicles in Europe, have contributed to profit warnings from both BMW and Mercedes. The manufacturers may also lose out from escalating trade tensions: Beijing said it’s considering raising duties on imported large-engine vehicles after the European Union voted to slap tariffs of up to 45% on Chinese-made EVs.
The 30% fall for BMW and Mini brands in China compares to declines of less than 5% in both the first and second quarters from a year earlier. The slump in the world’s biggest auto market dragged overall BMW group vehicle sales down 13%. The company said a braking systems recall also affected deliveries.
For Mercedes, the overall 12% sales drop for its top-end cars in the period marks a setback for the brand’s push further upmarket. It’s yet another warning sign for Germany’s marquee industry, which is struggling with high costs at home and intensifying headwinds in China, where local manufacturers led by BYD Co. are dominating on EVs.
BMW and Mercedes shares were little changed on Thursday, but they’ve fallen 23% and 7% this year, respectively, amid the run of bad news from both companies. After all three major German carmakers — including Volkswagen AG — cut their financial guidance in September, investors have been braced for further weakness in deliveries.
While BMW sales declined in every region, EVs are proving a relative bright spot as other manufacturers struggle. Deliveries of battery-powered BMWs such as the i4 sedan and iX1 sport utility vehicle rose 10% to 103,440 units in the third quarter compared to a year ago.
The results contrast sharply with those of Mercedes, which said its wholesale deliveries of passenger EVs plummeted 31% to just 42,500 units. The company said its plug-in hybrid sales rose 10% on robust demand in the US.
Mercedes’ latest EVs have been met with a tepid response from consumers in Asia’s powerhouse economy and elsewhere. Younger drivers in China are increasingly turning to homegrown brands that are perceived to have more advanced in-car digital and entertainment technology.
Volkswagen AG, which owns the Audi and Porsche brands, is due to report third-quarter deliveries on Friday.
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