Luxury Carmakers Struggle in Germany and China Amid Economic Uncertainty
The luxury car market in Germany and China took a hit in 2024, with top-end brands like BMW, Mercedes-Benz, and Audi experiencing significant declines in sales volume. This downturn is attributed to wealthier consumers exercising caution in their purchasing decisions due to economic uncertainty and slower-than-expected electric vehicle sales.
BMW Sees Overall Sales Drop
BMW reported a 2.3% decline in overall vehicle sales for its BMW brand, with a more pronounced drop of 13.4% in China and 5.3% in Germany. This marks a significant shift from previous years, as the brand has traditionally performed well in these markets.
Mercedes-Benz and Audi Also Affected
Mercedes-Benz Cars saw a 3% drop in sales, with a 7% decline in China and a 9% decline in Germany. Audi, meanwhile, experienced a 12% drop in sales, with a 11% decline in China and a staggering 21% decline in Germany.
China’s Domestic Market Remains Steady
Despite the struggles of foreign carmakers, China’s domestic market maintained steady growth in 2024. However, foreign brands with less competitive electric vehicle line-ups lost ground to Chinese EV-only rivals, who benefited from a price war and subsidized trade-ins for greener vehicles.
German Car Demand Remains Low
In Germany, car demand remains well below pre-pandemic levels, with around 2.8 million cars sold last year – a 1% decline from 2023 and a quarter below 2019 sales. Battery-electric sales in the country are down by a quarter from 2023, while hybrid sales rose 12% to around 950,000.
Electric-Only Sales Buck the Trend
One bright spot for BMW was its electric-only sales, which rose 13.5% to around 430,000 globally. In contrast, Mercedes-Benz’s battery-electric sales fell by 23%. However, Mercedes-Benz did see a 34% jump in its top-end vehicle sales in the fourth quarter, driven by solid U.S. demand.
U.S. Demand Offers a Glimmer of Hope
The strong U.S. demand for Mercedes-Benz’s top-end vehicles may be a sign that dealers are stocking up inventory ahead of potential tariffs on European-made cars. This could provide a much-needed boost to the luxury car market in the coming year.
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