For a long time, China was considered a savior for the auto industry. But the upward trend is slowing down, and especially the traditional manufacturers are facing new challenges.
For nearly four decades, the Chinese economy knew only one direction: upwards. But slowly clouds are gathering in paradise, the upturn does not threaten to tip, but slows noticeably. Economic growth is expected to be only around six percent in the coming years. So far, China has posted double-digit growth. The reasons are manifold, for example, many neighboring countries like Bangladesh are becoming more and more competitive, and at the same time the cost of production, which has so far been very favorable in China, is also increasing. In addition, many provinces in China are now heavily indebted, so the time of costly economic development programs is over for the time being.
This is also noticeable in the auto industry, which sold fewer vehicles in 2018 than in the previous year for the first time since the 90s: Ford recorded the largest decline at minus 38 percent, the French PSA group suffered similarly large losses and even market leader Volkswagen reported a minus of 2 percent , However, the established carmakers are not only troubled by the somewhat gloomy mood in the economy, it is also the new Chinese manufacturers that are driving the grandees from the old world into the parade. Chinese manufacturers such as BAIC, Chang'an or Haval are currently experiencing declines. GAC, Geely or Roewe prove with up to 24 percent plus that there is another way.
The problem: cars from the West are no longer self-runners, the Chinese manufacturers have caught up in terms of quality in recent years, and far outstripped the established carmakers in the fields of electric mobility and infotainment.
Many Chinese customers are now every inch more touchscreen width worth more than one or the other horsepower and in the e-car market, especially the Germans in China does not matter. But this segment is booming, but because the Chinese government is pursuing a strict electrification policy: In the metropolitan areas get almost only e-cars a license, charging stations en masse are pounded out of the ground and the own wallbox is formally thrown the customer. The deployment of electromobility is planned on a per-rod basis, and the same applies to the expansion of the 5G network, which is considered a driver of autonomous driving. Another example shows that the Chinese are masters in stringent planning: 27 Airports have been built and commissioned in China since the start of construction of the German capital city of Berlin.
But back to the car: another problem for the established manufacturers is that many customers buy a car for the first time. Brand loyalty is unknown to them.
After all: From their corporate history, the premium manufacturers such as BMW, Mercedes or Porsche, whose image currently lures the affluent Chinese into the showrooms in droves, continue to profit. If these brands manage to retain new customers in the long term, they will continue to have a bright future ahead of them. After all, most premium new customers in the Middle Kingdom are only between 20 and 30 years old and will buy numerous other vehicles in their car buyer life.
But the great old woman should not rely on the splendor of her name alone. The Jaguar Land Rover painfully notes that have sold fewer vehicles in the past 21 percent. Without an attractive range of models, the premium seal does not help much, but the British have little to offer except the outdated Range Rover. And whether the new Evoque launched just in Europe can stop the downward trend, is questionable: The small lifestyle Hochbeiner comes in a time when the SUV demand in China - unlike in the rest of the world - is declining, and visually similar quite strong the predecessor. To show that they are driving a new car, however, is extremely important to Chinese customers: it is not for nothing that the new 7er BMW tears open its grille opening. While the latest BMW fashion crops up a lot with us shaking our heads, the design in the Far East is well received. But the fact that we have to bow to the Chinese taste has long been a fact: The Mercedes S-Class, for example, is tailored to the Chinese market. For Europe, the engineers in Stuttgart would certainly not have developed an ambient light with 256 different colors. And that's not going to change the little bite that the Chinese market is doing right now: with more than 28 million vehicles sold each year, it's setting the tone.