The shadow of deflation in China continues to loom as the general public tightens their wallets due to the sluggish economy and ongoing real estate crisis, leading to weak consumption and dragging down luxury and premium brands. Demand for luxury cars in China remains soft, compounded by domestic low-cost competition from brands like BYD, causing Porsche AG’s sales in China to plummet by 21% in the third quarter.
The German luxury sports car manufacturer Porsche revealed on Thursday (October 9) that the sales drop in the Chinese market dragged down its global shipments, with a total of 212,509 vehicles sold globally in the first nine months of this year, representing a 5.7% decrease in sales.
In the first nine months, Porsche sold 22,492 vehicles in the German market, a 16% year-on-year decrease; 64,446 vehicles in the North American market, a 5% increase; and 32,195 vehicles in the Chinese market, a 26% decline.
In September, the Stuttgart-based company revised its performance outlook due to weak demand, pressure in the Chinese market, and increased tariffs by the United States.
Western manufacturers in the Chinese automobile market are facing competition from domestic brands like BYD and Xiaomi. The low-priced domestic cars in China have squeezed the market share and profit margins of Western manufacturers, while the slowing real estate market in China has dampened demand for luxury cars.
Data released this week by Mercedes-Benz Group and BMW Group also indicate a decline in sales in China. Although BMW saw increases in sales in other global markets in the third quarter, its sales in China dropped by 0.4% year-on-year to 147,000 vehicles. Mercedes-Benz sold 125,000 vehicles in China, marking a steep 27% decline.
Earlier this week, BMW Group lowered its profit expectations, citing declining sales in the Chinese market and related costs due to U.S. tariffs.
In recent years, Porsche has been on a downward trend in the Chinese market. In 2022, Porsche saw its first decline in sales in China, dropping by 2.5%. In 2023, Porsche delivered a total of 320,000 new vehicles globally, a growth of 3.3%, but with a 15% decrease in deliveries in China. In 2024, Porsche’s deliveries in the Chinese market plummeted by 28%.