Arab Today, arab today german automakers feel pinch from chinese slowdown
Last Updated : GMT 07:42:21
Arab Today, arab today
Arab Today, arab today

German automakers feel pinch from Chinese slowdown

Arab Today, arab today

Arab Today, arab today German automakers feel pinch from Chinese slowdown

Automobile
Frankfurt - AFP

The slowdown on the Chinese automobile market, the world's largest, may be affecting the entire industry, but will hit German makers the hardest given their strong presence there, analysts said.

At the IAA auto show in Frankfurt, which opened to the press on Tuesday and will invite the general public from Saturday, German companies such as Volkswagen, BMW and Mercedes have the biggest stands, generally dwarfing those of their foreign rivals.

But the impressive displays cannot hide the difficult position they find themselves in, despite the new dynamism of cars sales in Western Europe and the United States.

"The golden years are over in China," said Stefan Bratzel, director of the Center of Automotive Management (CAM).

While car sales practically trebled in the world's number two economy to 23 million units between 2007 and 2014, they are projected to grow by just 35 percent between 2014 and 2021, according to forecasts by consultants AlixPartners.
Gone is the era of double-digit growth rates: after 14 percent in 2013 and then 7.0 percent in 2014, market experts are projecting growth of "around three percent" this year.

"The normalisation of the Chinese market was expected," said Elmar Kades at AlixPartners.

But a slowing economy coupled with falling stock markets are putting additional brakes on sales of foreign-made cars in China.

And German companies stand to feel the pinch the most, since they have long been present in China and earned huge profits from the explosion in demand there in the past.
"For years now, rivals could only see the tail-lights of their German competitors. But the air is getting thinner for them, too," said Peter Fuss, auto expert at EY.

"Their strong dependence on the Chinese market could now be seen as an Achilles' heal," Fuss said.
China represents more than a third of their global sales for German heavyweight Volkswagen.

That is a similar proportion to that of US rival General Motors.

But the two are not equally placed when it comes to how they will cope with slowing demand.

German expert Ferdinand Dudenhoeffer said that makers of cheaper, more affordable cars will fare better than their higher-end rivals.

And GM with its inexpensive Baojun is therefore in a better position than the German giant, which owns Audi, Porsche and Skoda.

At the end of July, VW -- which has overtaken Toyota as the world's number one carmaker -- scaled back its sales targets given the situation in China.

Dudenhoeffer predicted that the premium sector, dominated by German brands such as Audi, BMW and Mercedes-Benz, would see stagnant sales in China this year and a decline of four or five percent in 2016.
Mercedes-Benz, which is owned by Daimler, is still something of an exception.

For a long time it trailed behind rivals Audi and BMW. But a range of new products enabled it to notch up growth of 28 percent in China during the period from January to August.

By contrast, the other two are hurting, with Audi sustaining a drop in sales of 4.1 percent in China in August, and a drop of 0.8 percent in the first eight months.

BMW saw its sales fall by 1.4 percent in August, but managed to clock up a modest 0.9-percent increase in sales in the first eight months.

- Brave face -

Nevertheless, German carmakers were trying to put on a brave face at the IAA.

"Growth in China has slowed, without doubt. But I believe demand for mobility will remain very strong," said Volkswagen CEO Martin Winterkorn.

BMW chief financial officer Friedrich Eichiner agreed, saying that "despite the current development, China still has substantial growth potential".

"We knew it couldn't go on for ever. It was clear that we wouldn't always see high double-digit growth," Eichiner said.

With just 70 cars for every 1,000 people in China, compared to 500 for every 1,000 in Germany, there is still substantial potential for growth in the medium and long-term, analysts said.

"It remains the most important car market in the world," said the head of the German automakers' federation VDA, Matthias Wissmann.

"German makers continue to command a strong position. The goal is to hold on to that position."

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today german automakers feel pinch from chinese slowdown Arab Today, arab today german automakers feel pinch from chinese slowdown

 



Arab Today, arab today
Arab Today, arab today Fadi explains secrets of  Nancy Ajram's newlook

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook
Arab Today, arab today Tourist guide explains types of tourism

GMT 18:28 2017 Saturday ,25 February

Tourist guide explains types of tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Iran complying with nuclear deal

GMT 07:14 2017 Saturday ,25 February

Iran complying with nuclear deal
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Ola Ghanem hopes to work with M.Ramadan

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 06:08 2017 Thursday ,23 February

Actress Lobna Abdel Aziz proud of her career

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 10:20 2017 Thursday ,23 February

Brazil's top diplomat resigns

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday