After decades of China’s market domination for high -performance cars with precision engineering, German automakers lose to Chinese opponents who have shifted the definition of a high -tech car to an electric, smart and accessible car.
Many new Chinese vehicles resemble their German opponents, such as the wildly popular Xiaomi SU7, which mimics Porsche’s Taycan. The SU7 competes with Taycan in power and braking, but also includes complete artificial intelligence that can, for example, help with parking guides and greet drivers with their favorite song. The cherry on top: sells for about half of the price of a taycan.
As a result, the German automakers who have been ordered the China car market for decades now seeing their sales decline, while Xiaomi – a leading Chinese smartphone maker – last year sold more than 100,000 Su7 models.
Among the toughest blows was Porsche, who said last month that its traditions in China fell 28 % in 2024. The year by 3 %.
For years, German automakers have been based on the Chinese market to offset the weaker demand elsewhere, leading them to ignore deeper structural problems at home. The head among them was the reluctance to adopt the technology that has come to determine driving in China: electric vehicles equipped with sophisticated software and, increasingly, artificial intelligence.
“The Germans, but also the Americans and the Japanese-Koreans, the established Western manufacturers have greatly underestimated the potential of the development of Chinese manufacturers, that is, in the important areas of electromicity and vehicles determined by the software,” Stefan said, ” Bratzel, Director of the Car Management Center in Bergisch Gladbach, Germany.
Market experts said that progress in software and features such as automated driving and remote control had become standard in Chinese electric cars, pressing European automakers used to redeem their trademarks to accelerate their game.
“I think Chinese consumers are now ready to accept that Chinese companies can produce cars that are considered a premium for them,” said Gary Ng, economist at Natixis Corporate & Investment Banking.
This month, Porsche announced that it will be involved with the head of funding and the top sales manager, who were both under pressure for Porsche’s poor performance, including China.
Adding the pressure, President Trump has directed his advisers to design new levels of duties for America’s trade partners, including the European Union. This could harm Porsche, which, unlike BMW, Mercedes-Benz or other Volkswagen brands, supplies the US market only with exports from Germany.
Last week, Porsche said it would reduce to 1,900 jobs in Germany in the coming years, in the midst of a decline in world demand. Sales of electric Taycan declined by almost half last year, to 20,836 deliveries and sales of the new Panamera, a hybrid model, decreased 13 % last year, partly because Chinese buyers did not show as much interest as expected.
The extent of the Porsche problem is reflected in car buyers such as Seaky He, a creator of social media content living in Changsha in China’s central Hunan province. In 2017, she bought her first car, a bright red Mercedes-Benz Cla Coupe. But last year, he decided to exchange it for a Xiaomi su7.
Xiaomi has loaded the SU7 with features such as automatic parking and remotely activated temperature control, which is exactly what she said, and other new Chinese drivers, wanted a car.
“By choosing my new car, I didn’t even think about buying another German vehicle,” said Ms.
The Su7 is not yet available for export, but some models have reached the United States. James D. Farley Jr., Managing Director of Ford Motor, said he had been sent from Shanghai to Chicago to drive for six months and “did not want to give up”.
Xiaomi also tests the publications of the Su7 Ultra, which will be released in China in March in the history of Germany, the Nürburgring. In October, the car set a record for the “fastest four -door sedan”, and the media and car fans were shouting the news, excited that the SU7 had hit Porsche’s Taycan 20 seconds.
Racetrack officials, however, pointed out that the Times were not comparable because the Chinese car was a preliminary version that competed in a virtually open category, while Taycan was a model ready for an exhibition space and ran into a high adjustable category. Regardless of this, the message was unquestionable.
“As German highways, we must be at least as innovative as we are more expensive,” Mr Bratzel said. “And this is gradually lost, because Chinese highways are now equally innovative, and some are even more innovative.”
Keith Bradsher References from Beijing contribute. Lee He contributed research from Shanghai.
