Porsche and Ferrari sales fall in China as car buyers turn to electric vehicles

Sales of luxury cars have plunged in China as consumers face greater pressure from a lagging economy and instead prefer lower-cost electric vehicles.

Deliveries of luxury brands including Porsche and Ferrari fell sharply in the first quarter in China, a stark contrast to their performance in the same period last year. Porsche deliveries in the first quarter fell 24% from a year earlier, while Ferrari deliveries to China fell 25%. BMW and Mercedes-Benz sales also declined year over year, the Wall Street Journal reported.

Disappointing first-quarter results for luxury carmakers in China partly reflect turmoil in the economy fueled by a struggling real estate sector. Economists have criticized China’s attempt to right the ship because the focus is more on supporting production and exports than on consumer demand.

The lackluster demand has had an impact, but so far it has less affected electric vehicles. About 1.03 million electric vehicles were sold in China in the first quarter, marking a slowdown in continued growth from the second quarter of 2023, according to government figures.

But while growth was lower than usual, electric vehicle sales were still up 14.7% from a year earlier. Sales of “new energy vehicles,” which include plug-in hybrids, increased 5.7% year-on-year to a sales figure of 1.71 million in the first quarter. In the United States, sales of electric vehicles increased by 3%, or about 270,000 vehicles, during the same period.

Thanks to price reductions caused by the entry of new local automakers, electric vehicle sales continued to perform better in May. Major automakers such as Warren Buffett-backed BYD, Nio and Seres Group saw strong growth last month. Bloomberg reported. Seres Group led the group by tripling its sales figures compared to the previous year. At the same time, Nio reported a 234% increase in May, while BYD sales rose just over 25%.

While foreign brands have traditionally dominated vehicle sales in China, a flood of domestic players has recently tried to capture a larger share of the market. Chinese automakers together surpassed 50% of auto sales in the country for the first time in July. A decade ago, French automakers such as Citroën, Peugeot and Renault together accounted for around 4% of China’s market share, but they have now fallen below 1%, Bloomberg reported.

Earlier this year, Tesla CEO Elon Musk praised Chinese automakers as “the most competitive in the world” for their rapid growth.

Leave a Comment