German Automakers in Crisis: The Full 2024 Story

Welcome to Issue #51 of The German Autopreneur!

For the first time ever, Tesla has outsold Audi. This fact alone tells us everything about 2024's dramatic shifts in the auto industry.

Today, I'm breaking down the full picture: VW, BMW, Mercedes, Audi, and Porsche. Let's understand what's working, what isn't, and most importantly - what this means for the future.

Reading time: 5 minutes

Volkswagen - A Giant Under Pressure

With 9.03 million vehicles delivered, VW remains a global leader. But looking deeper reveals serious challenges.

VW (Core Brand):

• Total sales: 4.8 million vehicles (-1.4%)

• Electric vehicle sales: 383,100 units (-2.7%)

• Electric vehicle share (percentage of total sales that are electric): 8.3% (unchanged from 2023)

• Best-selling EVs: ID.4/ID.5 (182,000)

To put this in perspective: While VW's core brand delivered 4.8 million vehicles, China's BYD increased their sales by 41% to 4.2 million cars. They're now nearly matching VW's core brand volumes.

The core issue? VW excels at making combustion engine cars. While this market remains huge, it's shrinking. Meanwhile, VW's electric share stays stuck at 8.3% - in a rapidly growing EV market.

Audi:

• Total sales: 1.67 million vehicles (-11.8%)

• Electric vehicle sales: 164,000 (-7.9%)

• Electric share: 9.8%

Audi delivered the worst performance among all VW brands. Tesla's historic overtaking of Audi's sales marks a symbolic shift in the industry.

Porsche:

• Total sales: 310,700 vehicles (-3%)

• Electric vehicle sales: 39,100 (-3.7%)

• Electric share: 12.6%

While Porsche struggles globally, there's a stark regional divide: Strong growth in Europe (+8%) and Germany (+11%), but a massive drop in China (-28%).

The Surprising Winners:

Skoda (+6.9%) and Seat/Cupra (+7.5%) are growing against the trend. Their secret? Better pricing and, in Cupra's case, a fresh approach: young, digital, emotional. They're successfully targeting a new generation of buyers.

BMW - Leading the Electric Transition

• Total sales: 2.2 million vehicles (-2.3%)

• Electric vehicle sales: 368,523 (+11.6%)

• Electric share: 16.7% (highest among German automakers)

BMW stands out in the electric transition. They're the only German automaker significantly growing their electric sales. Their success stems from two key strategies:

• Early commitment to electric vehicles with a broad model range

• Integrating EVs into their core brand instead of creating a separate electric sub-brand

Mercedes-Benz - Struggling to Transform

• Total sales: 2.0 million vehicles (-3%)

• Electric vehicle sales: 185,100 (-23%)

• Electric share: 9.3%

While their luxury strategy works well with the S-Class (50% market share in its segment), their electric vehicle performance is concerning. A 23% drop in electric sales raises serious questions about their future readiness.

China: The End of German Dominance

The decades-long success story of German brands in China has ended. The numbers tell a brutal story:

• Mercedes: -7%

• VW: -8%

• Audi: -11%

• BMW: -13%

• Porsche: -28%

Multiple factors are driving this decline:

• Weak economy and real estate crisis

• Major shift to electric vehicles (over 40% market share)

• Rising strength of local manufacturers

• Extreme price competition

The reality of this new competition becomes clear when looking at Xiaomi's new SU7 electric car. This smartphone manufacturer surprised everyone with innovative features that traditional automakers don't offer. Their price? Starting at €29,000 in China - while a Porsche Taycan, which they're positioning against, costs €120,000. They sold 135,000 units in their first year.

Yes, wealthy Chinese consumers might still buy Porsches as status symbols. But relying on this is dangerous. Underestimating China's ability to build their own luxury brands would be repeating past mistakes.

Key Lessons from 2024

1. The Global Market Split

The shift to electric vehicles is happening at dramatically different speeds:

• China: Full speed (over 40% market share)

• Europe: Medium pace (15-20%)

• USA: Slower (11%)

This creates a unique challenge for German automakers: They must develop combustion engines and electric cars simultaneously. While catching up on software and AI. Pure electric vehicle makers don't face this split focus.

2. Regional Rebalancing

With China no longer the guaranteed growth market, German automakers must find new opportunities. South America shows promising signs, and India's importance is growing. Success now requires a truly global strategy, not just a China-focused one.

3. The Future Is Now

I spent years in meetings where we created fancy PowerPoints about this transformation. We discussed it endlessly. We made strategies and plans. And then this future suddenly arrived. Despite all our preparation, it still caught us off guard.

The change happened faster than anyone expected. And now we find ourselves in this new reality we weren't quite ready for.

The most concerning realization? Strong brands were always German automakers' biggest asset. But today, that's no longer enough to succeed.

The 2024 results make one thing clear: German automakers must transform faster than ever. The challenge grows daily. Markets move at different speeds. Customer expectations vary widely between regions. New technologies keep reshaping the industry. Geopolitical tensions make everything even more complex. Trump's policies and strained China-Europe relations are just two examples.

The rules have changed completely. Now German automakers must prove themselves in an entirely new world. And in this world, past success means nothing.

🔗 Sources

That's all for today.

Feel free to reply to this email with your thoughts.

Until next week,
— Philipp

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