Mercedes, BMW, VW, Audi, Porsche lose China ground

Germany's luxury automakers, including Mercedes-Benz Group AG, BMW AG, Volkswagen AG, Audi AG, and Porsche AG, are witnessing a significant decline in sales within China's market. The German companies recently suffered a 30% drop in sales, which was worse than the overall market's decline. Mercedes-Benz attempted to counter this challenge by partnering with fast-food chain McDonald's for the "So Mc-Benz" campaign, featuring a cheeseburger figurine on its electric CLA sedan.

However, the ads failed to boost sales, with Mercedes selling only 1,153 units of the CLA in China during the first half. BMW, Volkswagen, and Porsche also reported similar declines. Chinese manufacturers, such as Xiaomi and BYD Co., have gained ground by offering advanced electric vehicles (EVs) at competitive prices, with superior features such as advanced automated-driving functionality and mobile-phone first entertainment systems.

The German automakers are struggling to maintain their luxury appeal, as they are perceived as trailing behind local manufacturers in software and EV technology. The situation is exacerbated by the fact that German carmakers still operate on the development-to-market schedule of the gasoline era, refreshing products every four years or longer.