Electric cars immediately catch the eye in the southern Chinese metropolis of Shenzhen. Unlike vehicles with a combustion engine, they do not have a blue license plate, but a green one. The biggest problem of German manufacturers in China quickly becomes apparent: while many German brands are represented in the “blue” cars, Chinese manufacturers dominate in the cars with green license plates.
Electric cars are no exception on the streets of Shenzhen, they are ubiquitous. In some parts of the city, there are already more cars with green than blue license plates buzzing through the streets. China is the largest car market in the world and the most important for German manufacturers. But the situation is tense. According to the German Association of the Automotive Industry (VDA), the Germans sold 4.4 million cars in China last year, which corresponds to a market share of 19.1 percent. In the rapidly growing business with electric drives, however, the market share was only five percent. No German in the top 10 There is not a single German model among the ten best-selling electric cars in China. Only Tesla is the only foreign manufacturer to make it into the ranking, which is otherwise dominated by the Chinese car manufacturer BYD from Shenzhen automotive industry. In terms of price, the Chinese vehicles are particularly interesting in the lower vehicle classes. But the Chinese were also getting closer and closer to the premium brands – at more affordable prices. Reindl suspects “that the German manufacturers in China will continue to lose market share”. by far the most important market in recent years, mixed to difficult. The corona lockdowns and the chaos in the supply chains hit production and the dealer network. In 2022, sales of the VW brands across all drive types in China slipped by 3.6 percent to just under 3.2 million vehicles. Electric sales increased by more than two thirds to 155,700 units – but VW is starting from a comparatively low level and had problems starting with the ID series of its core brand. Some of the latest models offered in China also met not always to the taste of the clientele. The buyers missed certain equipment and program functions that are already standard with some other car manufacturers. Delays and development problems in the internal software division Cariad are now to be made up for. The group also hopes to get closer to the specifics of demand here through its own China branch, and VW is working with the AI company Horizon Robotics on autonomous driving Positioning products even higher, i.e. in an even more demanding premium segment, explains car expert Reindl. Many Chinese were becoming more and more wealthy and also wanted to stand out when it came to cars. He sees a problem with Volkswagen cars, the brand is much more dependent on the smaller vehicles. That will be quite a challenge because Chinese cars are significantly cheaper. Mercedes-Benz is doing better. The company is pursuing a luxury strategy. Instead of relying on quantity, the particularly expensive cars should also bring in a particularly large amount of profit. This seems to be working in China: For example, more than every second car from the luxury brand Maybach, which belongs to Mercedes, went to the Middle Kingdom last year. Without the shares in China, the German car manufacturers could not exist, says industry expert Ferdinand Dudenhöffer. This is not only due to the number of vehicles sold, but also to their value. In China, premium vehicles are primarily sold and not compact vehicles. “The money that is paid to the workers and employees and shareholders in Germany is earned in China,” says Dudenhöffer. “We couldn’t go into the transformation without the Chinese.” Without the knowledge from China, the Germans wouldn’t be able to build competitive cars in the future. The Chinese value the German brands very much for their high quality and because they look balanced, says Dudenhöffer. When it comes to driving characteristics, processing and design, German vehicles are leaders. But when it comes to future topics such as electromobility or software, the Chinese are setting the standards.