China is becoming a risk for the automaker by the profit maker



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Stuttgart, BeijingHubertus Troska is keen on his learning journey program. Mandarin, director of Daimler, works up to nine hours a week, either face-to-face with a coach, or via voice recordings and video chats. Also this morning, the Daimler Committee, which heads the "Greater China" department of the Swabian car manufacturer and is currently in Stuttgart, was again busy.

For 58-year-olds, the broadening of his Chinese vocabulary expresses, on the one hand, respect for the partners of the People's Republic, which reinforces his belief in the long-term strength of the extreme automotive market. Oriental.

"We remain absolutely optimistic about China's development," Troska said Wednesday. With its flagship Mercedes-Benz brand, Daimler will have sold more than 600,000 vehicles in the Far East by the end of November – more than ever. At the same time, the biggest car market in the world is "normalizing", as Troska calls it.

In other words, even with customers from the Far East, the money is not so loose. New car sales declined in the first 10 months of activity. From the beginning of January to the end of October, only 18.4 million cars were sold in China. That's 3.4% less than the year before.

For the first time since 1990, the largest sales market of German vehicle manufacturers is threatening to contract this year.

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While mbad producers such as Volkswagen are already struggling with declining sales in China, Troska is still confident of being able to dissociate itself from the general trend. The premium sector continues to be a "safe bet," says the Daimler manager.

Experts are more skeptical. "The collapse in China will also affect high-end manufacturers with a lag in time," said Ferdinand Dudenhöffer, director of the Automotive Research Center (CAR) of the University of Duisburg-Essen.

Great dependence

The first effects are already recognizable. For example, while Daimler recorded double-digit growth in China in the first half, single-digit increases were recorded in the last four months.

"Trump triggered by the Trump customs war, the Chinese car market is cooling down and will not exceed sales levels for 2017 until 2021," predicts Dudenhöffer. If that happens as expected, German automakers will have a hard time getting it done.

The huge growth of Volkswagen, Daimler and BMW in recent years was mainly due to good deals in China. Germans are now extremely dependent on developments in the Far East. It could be revenge now. China threatens to turn the profit generator into a global risk for domestic manufacturers.

Volkswagen is particularly vulnerable. The car manufacturer Wolfsburg sells more than 40% of its cars in China. Currently, the market is a "challenge", said Chinochem Jochem Heizmann a few days ago at the Guangzhou auto show. "Since June, every month is getting worse," he added.

In October, Wolfsburg's salary was 8.3% lower. VW will not reach the targets set early in the year, admitted Heizmann.

One of the reasons for the reluctance of Chinese buyers is the concern over the trade dispute between China and the United States, which has particularly affected American brands such as Ford or GM. They had to accept a drop of nearly 14% in deliveries in the first ten months.

Japanese automakers grew by 5% over the same period, or 9.4% in October alone.

Conversion is no alternative

The mbad market weakens the weakening economy. "A brand like VW can not escape this general trend," said Cui Dongshu, general secretary of the Association of Chinese Car Manufacturers.

He pointed out that demand has mostly fallen in small provincial and district cities. They have been responsible in recent years for the rapid growth of the market.

The problems in their most important market can not be used by VW, Daimler and BMW in the current situation. After all, they must spend billions to control the pbadage of burners to electromobility.

Conversion is no alternative – especially in China. The state government is asking manufacturers to meet mandatory quotas for electric cars over the next year. According to this, 10% of the vehicles put on sale should be electrically powered. Otherwise, penalties are imminent.

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