Subscribe free to our newsletters via your
. 24/7 Space News .




CAR TECH
German automakers feel pinch from Chinese slowdown
By Estelle PEARD
Frankfurt (AFP) Sept 15, 2015


The slowdown on the Chinese automobile market, the world's largest, may be affecting the entire industry, but will hit German makers the hardest given their strong presence there, analysts said.

At the IAA auto show in Frankfurt, which opened to the press on Tuesday and will invite the general public from Saturday, German companies such as Volkswagen, BMW and Mercedes have the biggest stands, generally dwarfing those of their foreign rivals.

But the impressive displays cannot hide the difficult position they find themselves in, despite the new dynamism of cars sales in Western Europe and the United States.

"The golden years are over in China," said Stefan Bratzel, director of the Center of Automotive Management (CAM).

While car sales practically trebled in the world's number two economy to 23 million units between 2007 and 2014, they are projected to grow by just 35 percent between 2014 and 2021, according to forecasts by consultants AlixPartners.

Gone is the era of double-digit growth rates: after 14 percent in 2013 and then 7.0 percent in 2014, market experts are projecting growth of "around three percent" this year.

"The normalisation of the Chinese market was expected," said Elmar Kades at AlixPartners.

But a slowing economy coupled with falling stock markets are putting additional brakes on sales of foreign-made cars in China.

And German companies stand to feel the pinch the most, since they have long been present in China and earned huge profits from the explosion in demand there in the past.

- German tail-lights -

"For years now, rivals could only see the tail-lights of their German competitors. But the air is getting thinner for them, too," said Peter Fuss, auto expert at EY.

"Their strong dependence on the Chinese market could now be seen as an Achilles' heal," Fuss said.

China represents more than a third of their global sales for German heavyweight Volkswagen.

That is a similar proportion to that of US rival General Motors.

But the two are not equally placed when it comes to how they will cope with slowing demand.

German expert Ferdinand Dudenhoeffer said that makers of cheaper, more affordable cars will fare better than their higher-end rivals.

And GM with its inexpensive Baojun is therefore in a better position than the German giant, which owns Audi, Porsche and Skoda.

At the end of July, VW -- which has overtaken Toyota as the world's number one carmaker -- scaled back its sales targets given the situation in China.

Dudenhoeffer predicted that the premium sector, dominated by German brands such as Audi, BMW and Mercedes-Benz, would see stagnant sales in China this year and a decline of four or five percent in 2016.

Mercedes-Benz, which is owned by Daimler, is still something of an exception.

For a long time it trailed behind rivals Audi and BMW. But a range of new products enabled it to notch up growth of 28 percent in China during the period from January to August.

By contrast, the other two are hurting, with Audi sustaining a drop in sales of 4.1 percent in China in August, and a drop of 0.8 percent in the first eight months.

BMW saw its sales fall by 1.4 percent in August, but managed to clock up a modest 0.9-percent increase in sales in the first eight months.

- Brave face -

Nevertheless, German carmakers were trying to put on a brave face at the IAA.

"Growth in China has slowed, without doubt. But I believe demand for mobility will remain very strong," said Volkswagen CEO Martin Winterkorn.

BMW chief financial officer Friedrich Eichiner agreed, saying that "despite the current development, China still has substantial growth potential".

"We knew it couldn't go on for ever. It was clear that we wouldn't always see high double-digit growth," Eichiner said.

With just 70 cars for every 1,000 people in China, compared to 500 for every 1,000 in Germany, there is still substantial potential for growth in the medium and long-term, analysts said.

"It remains the most important car market in the world," said the head of the German automakers' federation VDA, Matthias Wissmann.

"German makers continue to command a strong position. The goal is to hold on to that position."

bur-esp/spm/fz/rl

Volkswagen

BMW

General Motors

Toyota

Daimler

Thanks for being here;
We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain.

With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords.

Our news coverage takes time and effort to publish 365 days a year.

If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.

SpaceDaily Contributor
$5 Billed Once


credit card or paypal
SpaceDaily Monthly Supporter
$5 Billed Monthly


paypal only

.


Related Links
Car Technology at SpaceMart.com






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





CAR TECH
Major carmakers pledge auto-braking for US market
Washington (AFP) Sept 11, 2015
Major global carmakers pledged Friday to install auto-braking technology as a standard feature for vehicles sold in the US market, government and safety officials announced. The technology, which is already an option on some cars, uses on-vehicle sensors to detect a possible collision and applies brakes if the driver fails to respond to warning sounds. Because human error and driver dist ... read more


CAR TECH
China aims to land Chang'e-4 probe on far side of moon

China Plans Lunar Rover For Far Side of Moon

Russia Eyes Moon for Hi-Tech Lunar Base

Russia Gets Ready for New Moon Landing

CAR TECH
Opportunity Driving West To Reach New Rock Target

One small step for man as astronaut controls robot from space

ASU instruments help scientists probe ancient Mars atmosphere

What Happened to Early Mars' Atmosphere

CAR TECH
New Life for Old Buddy: Russia Tests Renewed Soyuz-MS Spacecraft

Opportunity found in lack of diversity in US tech sector

Boeing Revamps Production Facility for Starliner Flights

In Virginia, TechShop lets 'makers' tinker, innovate

CAR TECH
Progress for Tiangong 2

China rocket parts hit villager's home: police, media

China's "sky eyes" help protect world heritage Angkor Wat

China's space exploration potential has US chasing its own tail

CAR TECH
ISS Crew Enjoy Kharcho Soup, Mare's Milk in Orbit

Russian ISS Crew's Next Spacewalk Planned for February 2016

Mogensen begins busy ISS tour

Soyuz rocket with three astronauts launches towards ISS

CAR TECH
First Ever Launch Vehicle to Be Sent to Russia's New Spaceport in Siberia

US Navy to Launch Folding-Fin Ground Attack Rocket on Scientific Mission

US Launches Atlas V Rocket With Navy Communications Satellite After Delay

FCube facility enters operations with fueling of Soyuz Fregat upper stage

CAR TECH
Earth observations show how nitrogen may be detected on exoplanets, aiding search for life

Distant planet's interior chemistry may differ from our own

Earth's mineralogy unique in the cosmos

A new model of gas giant planet formation

CAR TECH
Material scientists develop transparent glass 3-D printing technology

Billie Holiday to return to New York stage -- by hologram

Indications of the origin of the Spin Seebeck effect discovered

Digital Fusion Solutions to help U.S. Army with laser project




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement All images and articles appearing on Space Media Network have been edited or digitally altered in some way. Any requests to remove copyright material will be acted upon in a timely and appropriate manner. Any attempt to extort money from Space Media Network will be ignored and reported to Australian Law Enforcement Agencies as a potential case of financial fraud involving the use of a telephonic carriage device or postal service.