China is a Sales Guarantor for German Automotive Manufacturers6. February 2017
The Chinese automotive market has become increasingly important for German automotive manufacturers in recent years. Ernst & Young reported that in the year 2016 approximately 34 percent of the world-wide passenger car sales by the German automobile manufacturers Volkswagen, Daimler and BMW were made in China. In 2015, the share was 30 percent and five years earlier it was only 22 percent.
Especially for Volkswagen, the Chinese market is extremely important since almost four out of ten cars are sold in China. Whereas, the share of BMW and Daimler is about 22 percent. The three German car companies were able to increase their sales by 13 percent last year on the Chinese market. Worldwide BMW, Daimler and Volkswagen increased their sales by a substantial 5 percent. Over the past eight years, the Chinese automotive market has developed into a sales guarantor for German automotive manufacturers. They were able to increase sales of 1.6 million vehicles in 2009 to 5 million in 2016.
In addition, Ernst and Young projected that China will continue to be the world’s largest automotive market. China will remain the most important growth market for German automotive manufacturers. Although the market in China is not yet saturated, slightly weaker growth is expected in 2017.
One reason for the lower projected growth is the reduction in tax concessions for small cars. As recently published, the concessions were reduced by 50%. Also the accumulated overcapacity of the Chinese automobile manufacturers could be a problem. If the sales figures slow down, dealers may decide to reduce inventory by lowering prices substantially. By doing so this would create a buyers’ market allowing people who could not previously afford cars to buy domestic brands trying to compete with a lower price than normal. However, it is not likely that a decline in sales in the luxury class will take place since the German vehicles are still a status symbol.
MPR China Certification GmbH and China Certification Corporation offers CCC Certification for Automotive Suppliers and Manufacturers. For manufacturers we offer CCC Certifications and the Complete Type Approvals (including emission and fuel consumption test) to enable sales of vehicles into the Chinese market.
For more detailed information, please download our free booklet “CCC Made Easy” here. You may also consider our book “A Brief Guide to CCC: China Compulsory Certification”, which can be ordered directly on Amazon here.
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