Why German carmakers are struggling in China | DW Business Special

Once riding high in the Chinese automotive landscape, German powerhouses such as Volkswagen and BMW are now being outpaced by burgeoning Chinese companies. Yet last year marked a surge in German automotive investments within China, a strategic move to fortify their presence in what is undeniably the world's biggest car market. Homegrown Chinese enterprises like BYD are advancing rapidly, particularly within the electric vehicle segment, a market deemed by the Chinese government as the cornerstone of its automotive future. DW speaks to Gregor Sebastian, Analyst at the Mercator Institute for China Studies, to ask whether German companies are throwing good money after bad and whether their billions of euros in new investments have put them on a road to nowhere.

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[same.]

People always complain about China required technologies transfer before allowing foreign companies to manufacture inside China from decades ago. But then, China also didn't forced these foreign car makers to make use of the cheap China labour and tap into its vast growing market for decades. It almost feel morally wrong that we now complain about it after making tremendous profits for decades under this type of deals and knowing full well from the beginning that this is the end game.

[k.k.c]

For 30 years, German car makers made money hand over fist in China without much complaints. The minute they are faced with strong competition in a totally different segment, all kinds of complaints, accusations etc start coming out. The JVs allowed them to sell millions of cars to the chinese state and consumers. Something they would not have been able to do alone on such a scale. Chinese EV makers would not only love having a state sponsor in the west, but they would potentially not be discriminated against in terms of access, bans, 'national security' excuses etc

[masterof]

In UK, my friend bought a BMW i3 REX. Right after its 3rd birthday, the range reduced dramatically. BMW refuse to recognise any product design fault, insist the customer to pay a big price to replace the battery. Don't blame China, it is the German electric car just isn't good enough!

[rabbitazteca]

The guy forget to mention that one of the main reasons for China's electric car success was due to their ability to innovate in the battery sector they produce some of the most advance EV batteries in the world. The y have CATL and BYD which are the world's number 1 and 2 largest battery producers for electric cars

[jacobrogers]

I've been in China for 3 weeks now. Their cars have a huge mix of technologies. Zeekr and WuLing for example have a lot of features in them. German cars may make new technologies but China crosspollinates the tech in every application you can imagine.

[silafaupaulmeredith]

China invested into EV as they saw that was the future whilst German and Japanese car makers were slow and reluctant to switch

[MMLL]

I am currently driving an German ICE that is only 4 years old and not in a rush for an EV, however, I do not mind to own an EV as a second to get a glimpse on what the future feels like. German brands WERE on top of the wish list but, I could only find one model that's relatively close to what I wanted. Turning a corner and look at the Chinese BYDs, they are really bang-for-bucks, costing around 40% of the German EV and comes fully-optioned.
My cash is right here on the table up for grab, but the Germans couldn't provide something for my needs.

[teslar]

The Chinese gave years notice of stopping the sale of ice cars. German makers and others ignored this believing the Chinese would delay the new rules. Unfortunately for Non Chinese car makers the Chinese held firm and this has been the cause of reduced sales and increased stock piles

[panyinji]

In general, the German brand premium reputation in China is dropping. In middle turn, it is the result of greedy financial leading target without enough investment on innovation and courage to change. it is a second splash on the face of policy makers and CEOs who depend too much on China and Russia.

[makesirich-pszw]

China's intellectual property advantages in the field of electric vehicles are far ahead of Germany.
This guy is hilarious and looking forward to protecting Kodak's film technology from being defeated by digital cameras

[teslar]

VW made the jump to EV’s faster than many. But they can’t make a dent in the Chinese market because the software is years behind and this is a key requirement for Chinese sales. VW are unlikely to get a foothold unless the significantly improve the digital experience in their EV’s

[scarlion]

the volkswagon I.D. series SUVs are very popular in china, which are running on the streets everywhere. with a green background license plate, means they are gov subsidized new energy cars same as the local brands.

[diligentmindz]

You omitted the tariffs that have been imposed on Chinese car manufacturers exporting to Europe to protect the European manufacturers.

[TheKkpop]

German car makers are not paying strong attention to new generation EV. Chinese government is pushing local car manufacturers to catch up with Tesla before the introduction of new emission standard.
It's time to collaborate or joint venture with Chinese car before losing more sales in the world largest car market.

[shuidifengliu]

In the 60s, Japanese cars were laughed at
In the 80s, the Korean cars received the same treatment
European car makers may not react fast enough to emerging competition

[Kennon]

Doesn't help that for years in the ICE era the German brands would show the latest models but put 10 year old engines in them for China. Typical they won't mind being shortchanged. Same thing still happens in India to this day with Zero star versions of popular cars with sub par metal and no airbags.

[GeorgeChuy]

Have to say the interviewee has struck home a very good point: you can't base your innovation centre too far from the market, or you will constantly be under the risk of losing the competition in a fierce market like China. Meanwhile from the perspective of China, I have to honor the foretelling insight Of those industry experts and politicians who have laid down the rules by which foreign car makers entered into the China market. A really clever hand.

[arcadyskoit]

German build quality is not great in 2023

[junguo]

He did not tell the truth. And he told lies. China gov has no limit on any car makers. German car maker has the same treatment as chinese car maker. It is unfair to say china gov support local maker. China gov treat same. China market is a fair market and free market, only the best can win the customers.

[yechen]

That’s where complacency leads — for decades the car makers can just enjoy a 20% market share there by doing nothing, so why bother with any innovation?
It is also very sad to see how Germany as a whole has slipped. When I visited Germany 23 years ago to attend the Expo, the country was well managed, for example, the trains were on time and it was safe to walk around at nights. How things have changed!