China’s Spending Slump Is Crushing Global Carmaker Profits
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(Bloomberg) — BMW AG and Volkswagen AG capped a painful earnings period for global automakers that are contending with waning electric vehicle (EV) sales and weak demand in China.
Both manufacturers on Thursday reported declining second-quarter earnings after their sales fell in the world’s biggest auto market, where a deepening home sales crisis is weighing on spending.

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- BMW and Volkswagen reported declining Q2 earnings due to weak EV sales and demand in China, impacting global automakers.
- The slowdown in China, coupled with inflation in Europe, complicates automakers' strategies, prompting cost cuts and restructuring.
- Despite challenges, BMW's EV sales and new models like Neue Klasse show promise, with significant R&D investment and technological advancements.
- BMW AG
- BMW AG faced declining second-quarter earnings due to weak sales in China but saw a surge in global deliveries of its EV models, beating Mercedes-Benz and Audi. The firm is increasing prices in China and has high hopes for its Neue Klasse generation of EVs, set for late 2025, aimed at reducing battery costs and boosting driving ranges. BMW's R&D spending soared to €4.2 billion in H1 2023.
- Volkswagen AG
- Volkswagen AG reported declining second-quarter earnings due to weak demand in China and restructuring charges that hurt its margins. VW's stock declined by as much as 2.5%, and its shares are down 10% this year. To address the downturn, Volkswagen is partnering with local firms like XPeng Inc. and preparing a new EV brand specifically for the Chinese market. More cost cuts are expected in the second half to meet annual goals.
- Mercedes-Benz Group AG
- Mercedes-Benz Group AG trimmed the upper range of its annual margin forecast due to the challenges faced by automakers, including persistent inflation and poor EV sales in Europe. The China slowdown and high competition are complicating strategies for automakers like Mercedes-Benz, affecting their overall performance.
- Stellantis NV
- Stellantis NV reported results that missed expectations during the same period BMW AG and Volkswagen AG reported declining earnings. The slump in China, persistent inflation, and weak EV sales in Europe are complicating automakers' strategies, including Stellantis, impacting their overall performance and causing challenges despite increased spending on new electric models and factory retooling.
- Nissan Motor Co. Ltd.
- Nissan Motor Co. Ltd. missed expectations in the recent earnings period, impacted by waning electric vehicle sales and weak demand in China. The company's performance reflects broader challenges faced by global automakers in the world's largest auto market amid a deepening home sales crisis and competitive pressures from local manufacturers.
- Ford Motor Co.
- According to the article, Ford Motor Co. reported earnings that missed expectations, affected by the broader issues impacting global automakers, such as waning EV sales and weak demand in China.
- BYD Co. Ltd.
- BYD Co. Ltd. is mentioned as a leading homegrown manufacturer in China, posing competition to Western carmakers. The article highlights how Western automakers, including BMW and Volkswagen, are struggling to keep pace with BYD's agility amid a challenging market impacted by factors such as China’s property crisis and rising trade tensions over EV subsidies.
- Toyota Motor Corp.
- Toyota Motor Corp. experienced a poor first half in China, with an 11% drop in sales, which negated the positive impact of a hybrid resurgence in North America. This slump contributed to the broader challenges faced by global automakers in the Chinese market, exacerbating the effects of a property crisis and rising trade tensions.
- Daimler Truck Holding AG
- Daimler Truck Holding AG cut its annual outlook due to softening sales in Europe and China. The decline in these markets is contributing to a challenging environment for automakers, which are facing waning electric vehicle sales and broader economic issues.
- XPeng Inc.
- XPeng Inc. is a local partner that Volkswagen is collaborating with in China to help turn the tide in their EV market. The partnership is part of VW's strategy to address decreasing demand and heightened competition in the region.
- 2023-05-16:
- BMW shares fell as much as 5.2% in Frankfurt, the steepest intraday drop since this date.
- 2024-08-01:
- BMW AG and Volkswagen AG reported declining second-quarter earnings.
- 2024-08-01:
- Daimler Truck Holding AG cut its annual outlook due to softening sales in Europe and China.
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