The Big Automakers’ Woes in China Persist

According to YiCai Global, American and European automakers such as Ford, Volkswagen, and Stellantis continued to face challenges in the Chinese market, reporting consecutive quarters of declining sales.

In particular, Volkswagen sold 2.1 million vehicles in China during the first nine months of the year, a 10% decrease compared to the same period last year. The Volkswagen Group reported a profit of €1.6 billion, or $1.7 billion, in the third quarter, representing a 64% decline from the previous year.

Marco Schubert, a member of Volkswagen’s executive team, attributed the group’s sales and profit decline in the third quarter primarily to the performance in the Chinese market.

International automakers have been losing market share in China as domestic consumers shift their preferences away from internal combustion engine vehicles. In contrast, companies like BYD, Geely Holding Group, and Li Auto have experienced surging demand for their affordable and diverse range of electric vehicles.

The Li Auto L7 electric SUV. Photo: CarnewsChina.

Ford sold a total of 133,000 vehicles in the third quarter, an 11% decline year-over-year. Stellantis, the parent company of Chrysler, Alfa Romeo, and Citroen, also experienced a 30% drop in sales in the Asia-Pacific region, selling 14,000 vehicles in the third quarter.

The challenges extend beyond mass-market automakers, with luxury car brands also facing difficulties in competing in the Chinese market. Porsche, for example, saw a 29% decrease in sales in China during the first nine months of the year, selling 43,000 vehicles.

General Motors (GM) has implemented various initiatives in the Chinese market, resulting in sales growth but without profitability. While GM’s sales increased by 14%, the company incurred losses of over $100 million, bringing its total loss in China to $347 million in the first nine months.

To address their business challenges, some automakers have started restructuring their operations and downsizing their factories. For instance, the Volkswagen-SAIC Motor joint venture announced the closure of its first factory by the end of 2023.

Ford’s factories remain operational, but instead of producing vehicles for the Chinese market, the company has shifted its focus to exporting cars to the Middle East and Southeast Asia to compensate for revenue losses.

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