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Sales crisis: The China problem of the German auto industry

2019-09-12T06:50:46.585Z

For years it goes downhill with the car companies. The image problems caused by the diesel scandal and the delayed turnaround in electronics are now accompanied by a real sales crisis.


The problems of the German car industry are currently similar to the minds of the Hydra: If you hit one, grow two new. Not even the glittering IAA show in Frankfurt can hide that. The difficulties of the industry are clearly visible at the auto show like nowhere else.

"We are not slipping into the crisis, we are in the middle of it," said Elmar Degenhart, CEO of Continental, one of the world's largest automotive suppliers, this week. "It does not help to make things more beautiful." In the medium term, redundancies can not be ruled out as a last resort. The economic development of the industry is the biggest problem.

This decline began with the diesel scandal four years ago, which led to a fundamental debate about exhaust fumes and climate damage of German vehicles. The whole thing just opens in a heated discussion about the meaning and nonsense of the high-consumption SUV, which ensure the corporations their good business today.

Sales in China are going badly

Added to this is the backlog of German manufacturers in electromobility. The major brands have introduced the change too late, but now the more drastic, so he caught the German suppliers cold. Their production is geared too much to parts for the combustion engine, but these are less and less in demand. The downward trend in the industry is reflected in the impressive price of the three major manufacturers BMW, Daimler and Volkswagen: Since 2018, the shares have lost significantly in value.

Economic problems are now added to the structural problems. Abroad, fewer and fewer German cars tend to be bought. "The balance of the first half of the year is predominantly negative on the international automotive markets," said the Association of the Automotive Industry (VDA) in the summer. In the large sales regions of China, USA and Europe, fewer vehicles had been sold than in the first half of 2018. Demand was also weaker in Russia and India.

Above all, business in China, which for a long time was the most important growth market for German manufacturers, is developing poorly. Sales there also fell in August by almost ten percent compared to the previous year. The numbers fell back within 14 months for the 14th time. However, this development not only affects the German manufacturers, but also the Chinese brands.

Stefan Reindl is Director of the Institute of Automotive Economics. "China is currently losing the most negative signal because it's the world's largest market," he says. The growth rates have melted off, the economy there is no longer as fast as it was a few years ago. In addition, "China is now experiencing similar problems as other industrialized nations too", from traffic collapse to exhaust emissions problems in cities. Many provincial governments would therefore pursue a restrictive policy on the re-registration of vehicles. And that affects the industry at the moment clearly.

Source: zeit

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