Even Mercedes can't stop the decline of German cars in China
Mercedes sold only 1,153 units in China in the first half of 2026.
Mercedes-Benz has struggled to maintain its position in the Chinese market despite decades of success, as sales of its electric CLA sedan plummeted in the first half of 2026. The company attempted to boost sales by partnering with McDonald's for a "So Mc-Benz" campaign, featuring a cheeseburger figurine on the car. However, the strategy failed, as Mercedes only sold 1,153 units of the CLA in China, far less than the 80,000+ units of similarly-priced sedans from Xiaomi Corp. The decline mirrors the challenges faced by BMW, Volkswagen, and Porsche, all of which reported at least a 30% sales decline in China during the same period.
The German automakers have tried various tactics to win over Chinese buyers, such as building long-wheelbase versions of their cars, incorporating advanced software, and slashing prices to undercut local competitors like Xiaomi and BYD. Despite these efforts, Mercedes-Benz admitted that the CLA was never meant to drive significant sales volume, but rather showcase its latest technology in the entry-level segment.
Chinese manufacturers are willing to endure losses to gain market share, and brands like BYD and Geely have seen their profits plummet due to a price war. The German automakers' expensive lineups and longer development cycles, which once catered to luxury buyers, now struggle to compete with local manufacturers' rapid turnover of EV models.
As Chinese car sales continue to accelerate, German companies face an uphill battle to regain their market position, with some, like Volkswagen, even considering job cuts and factory closures in the country.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.