October 16, 2024 | New Delhi, India
In the third quarter of 2024, BMW and Mercedes faced significant challenges. Their global sales dropped as both automakers struggled in China, the world’s largest auto market. Local competition and a slowing economy hit hard. This sales slump highlights the struggles of German luxury brands amid rising costs and the global shift to electric vehicles.
BMW and Mercedes Hit by Sluggish Demand
For Q3 2024, BMW reported a 13% drop in global sales, while Mercedes saw a 3% decline. Both brands experienced steep losses in China. BMW’s sales plunged by 33% in the region, and Mercedes’ sales dropped 13%. Chinese manufacturers, offering cheaper electric vehicles, have increased the competition significantly.
Struggles in the EV Market
- Mercedes BEV Sales: Mercedes suffered a 31% decline in global battery electric vehicle (BEV) sales, showing a drop in demand.
- BMW BEV Sales: In contrast, BMW’s BEV sales rose by 10% in Q3. This growth shows resilience, despite the broader challenges faced by the company.
EU Tariffs and Their Impact on German Automakers
Recently, the European Union imposed tariffs on Chinese-made EVs. This move adds more pressure on German automakers like BMW and Mercedes, who rely heavily on Chinese sales. These companies have raised concerns over the tariffs, which further threaten their market share in China.
Long-Term Outlook and Regulatory Changes
Additionally, BMW’s CEO Oliver Zipse has called for a revision of the EU’s strict targets on battery electric vehicles. He argues for a technology-agnostic approach, which would include options like e-fuels, biofuels, and hydrogen fuel cell vehicles. According to Zipse, this shift would reduce Europe’s reliance on China’s battery supply chain and maintain competitiveness in the automotive sector.
Conclusion
The Q3 2024 sales decline for BMW and Mercedes highlights the growing challenges faced by German luxury automakers. They are grappling with competition from Chinese EV manufacturers, rising production costs, and shifting global policies. To maintain their global leadership, BMW and Mercedes will need to adapt quickly and innovate further.