Luxury car sales in China have fallen sharply as consumers face growing pressure from a lagging economy, turning instead to cheaper electric vehicles.
Deliveries of luxury brands including Porsche and Ferrari fell sharply in the first quarter in China, in stark contrast to their performance in the same period last year. Porsche deliveries fell 24% in the first quarter from a year earlier, while Ferrari deliveries to China fell 25%. Sales of BMW and Mercedes-Benz also fell compared to last year. Wall Street Journal reported.
Disappointing first-quarter results for luxury car makers in China partly reflect economic turmoil caused by the struggling real estate sector. Economists have criticized China’s attempt to turn things around as an approach geared more toward supporting production and exports than consumer demand.
Weak demand has had an impact, but so far has had less of an impact on electric vehicles. About 1.03 million electric vehicles were sold in China in the first quarter, marking a slowdown in continuous growth since the second quarter of 2023, the company said. government officials.
But while growth was slower than usual, electric vehicle sales were still up 14.7% from last year. Sales of “new energy vehicles,” including plug-in hybrids, jumped 5.7% year-on-year to 1.71 million in the first quarter. US sales of electric vehicles increased by 3%or about 270,000 vehicles over the same period.
Thanks to lower prices caused by new domestic automakers entering the market, sales of electric vehicles continued to grow in May. Major automakers such as BYD, Nio and Warren Buffett-backed Seres Group posted strong gains last month. Bloomberg reported. Seres Group topped the list, tripling sales compared to a year earlier. At the same time, Nio reported sales growth of 234% in May, while BYD’s sales jumped just over 25%.
While foreign brands have traditionally dominated car sales in China, a flurry of domestic players has recently sought to capture a larger share of the market. Chinese automakers have collectively exceeded 50% of the country’s vehicle sales in first time in July. A decade ago, French automakers such as Citroen, Peugeot and Renault collectively accounted for about 4% of China’s market share, but their share has now fallen below 1%, Bloomberg reports. reported.
Earlier this year, Tesla CEO Elon Musk called Chinese automakers “the most competitive in the world” for their rapid growth.