BMW’s gradual slowdown in China

• BMW sales have fallen in China for two straight years and are on track for a third consecutive year of decline, even with aggressive discounts that now appear permanent due to competitive pricing from Chinese rivals
• The company's new Neue Klasse EV platform is expected to be outdated upon arrival in China, undermining BMW's former reputation as 'The Ultimate Driving Machine' with a technological edge
• BMW's China struggles mirror broader German automaker woes in the market, with Volkswagen, Mercedes-Benz, and Audi all experiencing sales drops of at least 30% in Q2, while VW fell to third place behind BYD

BMW's Gradual Slowdown in China

Key Developments

BMW China Struggles:

BMW is experiencing a significant downturn in China, with sales declining for two consecutive years and on track for a third consecutive year despite heavy discounting. The German automaker has issued three China-related profit warnings in under three years. Its upcoming Neue Klasse EVs risk being outdated before launch in the world's fastest-moving automotive market, as Chinese competitors offer premium models at lower prices that appear to have permanently reset market expectations.

Broader German Automaker Decline:

Germany's major automakers collectively suffered a dismal Q2 in China. Mercedes-Benz, Audi, and BMW all experienced sales drops of at least 30% from April-June. Volkswagen posted the steepest decline at nearly 37%, falling from China's top-selling position to third place behind BYD. Porsche sales also plummeted in the market.

Stellantis US Recovery:

In contrast, Stellantis reported a 38% increase in North American Q2 sales, driven by new RAM pickups and Jeep models. CEO Antonio Filosa's back-to-basics strategy appears successful, supported by launches including the Ram 1500 8-cylinder truck and refreshed Jeep Grand Cherokee.

Volkswagen Restructuring:

VW management seeks to double previously planned job cuts globally while reducing its model lineup and production capacity, though labor representatives blocked proposals to close four German assembly plants.

US Policy Impact:

The BlueGreen Alliance reports that Trump administration policies have caused cancellation or delay of $83 billion in clean energy investment across 223 projects, affecting 111,765 jobs through reduced federal EV and renewable energy support.

Market Implications:

The automotive industry faces regional divergence, with European premium brands losing ground in China while refocusing on traditional strengths in Western markets.