After decades of dominating the Chinese market for high-performance cars with precision engineering, German automakers have lost their Chinese rivals, shifting the definition of luxury cars to electric, smart and affordable cars did.
Many new Chinese vehicles resemble German rivals, like the hugely popular Xiaomi Su7, which mimics the Porsche Teikan. The SU7 is comparable to Taycan in Power and Braking, but also includes integrated artificial intelligence that helps you greet drivers in parking lots and favorite songs, for example. Cherry above: It's sold at about half the price of the Teikan.
As a result, the German car manufacturer, which had been leading China's premium car market for decades, is currently declining in sales, but last year, Chinese smartphone maker Xiaomi sold 100,000 models of the SU7. I did.
Among the most difficult hits were Porsche, which reported that delivery in China had plummeted 28% in 2024 last month. It's 3% per year.
For years, German automakers have relied on the Chinese market to ignore deeper structural issues at home to make up for weaker demand elsewhere. The main thing among them was their reluctance to adopt the technology that came to define driving in China. It is an electric vehicle with sophisticated software and increasingly artificial intelligence.
“Not only German, but also American and Japanese Koreans, as well as western manufacturers, have significantly underestimated the development dynamics of Chinese manufacturers, namely electromobility and software-defined vehicles.” said Stefan Bratzel. Automobile management centre in Gladbach, Belgisch, Germany.
Market experts have said that advances in software and features such as automated driving and remote control have become the norm for electric vehicles in China, and European carmakers will acquire brand names to enhance their games. It says it will be used.
“I think Chinese consumers are now ready to accept that Chinese companies can produce cars that they consider to be premium,” said Gary Ng, economist at Natixis Corporate & Investment Banking.
This month, Porsche announced that in a different way with the financial chief and top sales executive, both of which were under pressure from the poor performance of Porsche, including China.
In addition to the pressure, President Trump has directed his advisors to devise new tariff levels for American trading partners, including the European Union. This can damage Porsche, unlike BMW, Mercedes-Benz or other Volkswagen brands.
Last week, Porsche said it would cut up to 1,900 jobs in the coming years amid declining global demand. Sales of the electric Teikan fell nearly half last year, dropping to 20,836 delivery, while sales of the new hybrid model Panamera fell 13% last year.
The extent of Porsche's problems is reflected in car buyers like Seaky He, a social media content creator who lives in Changsha, Central Hunan Province, China. In 2017, she bought her first car, the bright red Mercedes-Benz CLA Coupe. However, last year she decided to trade it for a Xiaomi Su7.
Xiaomi has loaded the SU7 with features such as automatic parking and remotely activated temperature control. This is exactly what he and other young Chinese drivers said they wanted in the car.
“When choosing my new car, I didn't even think about buying another German car,” he said.
The SU7 is not available for export yet, but several models have reached the US. Ford Motor CEO James D. Farley Jr. shipped one from Shanghai to Chicago for six months and drove it, saying “I didn't want to give up.”
Xiaomi is also testing a removed version of the SU7 Ultra, which will be released in China in March. In October, the car set a record for the “fastest four-door sedan” with industry media and car fans cheering for the news, and excited that the SU7 defeated the Porsche Teikan in 20 seconds.
However, Racetrack officials say that since Chinese cars are essentially a competing version in open categories, while Teikan is a showroom-ready model, running in highly regulated categories, the era is comparable. I pointed out that I couldn't do it. Anyway, the message was unmistakable.
“As a German automaker, we must be at least as innovative as it is more expensive,” Bratzel said. “And it gradually lost it because Chinese automakers are now just as innovative, some even more innovative.”
Keith Bradshire I contributed a report from Beijing. you Contributed research from Shanghai.
