分类： business

The world’s largest automotive market, China, has delivered a sharp blow to top German automakers, with the April-June quarter of this year seeing double-digit sales declines that have hit global profit margins and forced strategic overhauls for major brands.

Newly released corporate data from the past week reveals that all four leading German brands — Volkswagen, Mercedes-Benz, BMW, and Porsche — suffered year-on-year sales drops between 30% and 41% in the second quarter alone. For the first half of 2024, the decline extended across all four manufacturers, with each reporting a year-on-year fall of more than 20% in Chinese deliveries. These slumps have squeezed overall corporate profits, in many cases erasing sales and revenue gains secured in other regional markets around the world.

The downturn in China comes at a particularly challenging moment for these legacy European automakers, who now face rising competition from Chinese brands not only in China but also in overseas markets, including their home region of Europe. Chinese EV leader BYD has already made significant inroads into European markets, challenging the historical dominance of German brands in their core segments.

Industry analysts note that the latest quarterly declines are among the most severe recorded by German automakers in modern Chinese market history. For example, Volkswagen Group, which has staked its long-term growth on heavy investment in the Chinese market, reported a 36.6% drop in second-quarter deliveries, totaling 424,300 vehicles. This decline was severe enough to drag the group’s global sales down 8.6% year-on-year, even as Volkswagen recorded delivery growth in both the European and North American markets. In response to the steep drop, Volkswagen has announced plans to cut its existing model lineup by as much as half to streamline operations and cut costs.

Multiple overlapping factors have driven the slump in sales for foreign automakers. China’s ongoing economic slowdown and prolonged downturn in the property sector have weighed heavily on consumer confidence, pushing many households to delay large-ticket purchases like new vehicles. Within the auto market itself, years of aggressive price competition have put established European brands under severe pressure, as cost-conscious consumers increasingly shift to more affordable models from domestic Chinese manufacturers.

Official industry data underscores the scale of the market contraction: the China Association of Automobile Manufacturers reports that total domestic passenger vehicle sales fell 24% year-on-year in the first half of the year, dropping to just under 8.3 million units. Global consultancy AlixPartners projects that full-year 2024 light vehicle sales across China will decline by roughly 10% from 2023 levels.

Beyond weak consumer demand, structural shifts in the Chinese auto market are working against German manufacturers. Unlike domestic Chinese brands, which have prioritized rapid expansion in the fast-growing electric vehicle (EV) segment, German automakers still retain their core strength in conventional internal combustion engine (ICE) vehicles, a segment that is contracting far faster than the overall market in China, where EV sales have outpaced ICE vehicle growth by a wide margin.

Chinese brands also hold an additional operational advantage: they refresh their model lineups far more frequently than foreign legacy manufacturers, allowing them to respond faster to shifting consumer preferences and introduce new technology at a quicker pace.

“Foreign automakers are going to have to fight for every share of the market,” Stephen Dyer, Asia-Pacific leader of the automotive practice at AlixPartners, noted in a recent news briefing. Independent auto analyst Lei Xing echoed this assessment, saying, “The German automakers are bearing most of the brunt” of the current market downturn and competitive shift, a sentiment echoed by brand representatives. Porsche, a Volkswagen Group subsidiary, described China’s current market conditions as “challenging” in an official statement, while Mercedes-Benz acknowledged that China is facing “a significantly weaker overall market and macroeconomic environment.”

The United Arab Emirates has reached an unprecedented all-time high in crude oil production just one month after withdrawing from the Saudi-led Opec alliance, new data shows, as the Gulf producer shrugs off geopolitical risks surrounding Iranian control of the Strait of Hormuz to seize full advantage of its new market autonomy.

In a recently published report released Friday, data from the International Atomic Energy Agency confirms the UAE pumped 4.1 million barrels of crude per day in June. This marks a dramatic 600,000 barrel per day increase over the country’s 2025 average production of 3.5 million bpd, and it outstrips the UAE’s prior record output of 4 million bpd set in 2020, a period when the Opec+ alliance was fractured by a brutal price war between Saudi Arabia and Russia.

The sharp production surge aligns with longstanding assessments from energy analysts that Abu Dhabi had long felt constrained by production quotas set under Saudi leadership within Opec. Over recent years, the UAE has poured billions of dollars into expanding its total oil production capacity, but repeatedly raised objections to Saudi Arabia’s coordinated supply cuts, which were designed to prop up global crude prices and blocked the UAE from maximizing its output.

Abu Dhabi formalized its exit from Opec in May, a move that came amid a broader rift with Saudi Arabia that extends beyond energy policy to include sharp disagreements over conflicts in Yemen and Sudan, as well as diplomatic stances toward Israel. The withdrawal has already drawn public approval from the Trump administration, which has prioritized keeping global energy prices stable amid the ongoing US-Israeli military campaign against Iran.

Geopolitical turmoil surrounding the Strait of Hormuz, a critical chokepoint through which roughly 20% of global oil supplies transit, has stirred widespread market volatility since the outbreak of the war in late February. At the peak of tensions earlier this year, when both Iran and the U.S. imposed blockades on the waterway, international benchmark Brent crude climbed above $100 per barrel. Contrary to the worst-case price spikes many analysts predicted, however, crude markets stabilized far faster than forecast.

Analysts attribute the contained price growth to two key factors: a historic release of strategic petroleum reserves from Western nations, and a 30% cut to China’s crude import volumes, which reduced overall global demand. This combination of expanded supply and softened demand has acted as a critical buffer for the fragile global economy, though the market has not been entirely unscathed: prices for key refined products including liquefied petroleum gas, diesel, and jet fuel have rallied significantly. Additionally, Asian energy buyers, who rely heavily on Gulf oil exports, have faced far steeper price hikes than customers in the United States and Western Europe.

The IAEA’s report also notes that while crude volumes are returning to global markets from the Gulf, refined product exports from the region remain less than 50% of pre-war levels. Despite this, the UAE’s ability to maintain consistent oil exports underscores its success in mitigating risks from Iranian control of the Strait of Hormuz.

The UAE operates a crude oil pipeline that bypasses the Strait of Hormuz entirely, delivering oil to the export terminal at Fujairah Port on the country’s east coast. The route is not entirely risk-free, however, as it remains vulnerable to potential Iranian drone attacks. In a June report, Reuters revealed the UAE paid billions of dollars to Iran in exchange for a halt to cross-border attacks, a major policy reversal for the country, which had joined the U.S. and Israel in launching dozens of strikes on Iranian targets since the outbreak of the war.

Maritime intelligence sources add that the UAE has also moved oil through the Strait of Hormuz using so-called “dark vessels” that operate with their automatic identification transponders turned off to hide their movements. The country has built its own dedicated fleet of oil tankers for these operations, and has also secured capacity from independent shipowners willing to accept the risk of Iranian strikes in exchange for far higher shipping rates.

NEW YORK – The International Energy Agency (IEA) has projected that global oil demand will experience an annual decline in 2026, marking the first such drop since the peak of the COVID-19 pandemic in 2020. The projected contraction, estimated at 1 million barrels per day for the full year, stems from elevated energy prices and unevenly distributed supply disruptions rooted in the ongoing conflict between the United States and Iran.

The core of the supply disruption centers on the Strait of Hormuz, the world’s most critical chokepoint for global oil and gas shipments. For more than three months, dozens of crude-laden tankers have remained stranded in the Persian Gulf, unable to traverse the waterway safely amid heightened hostilities between the two nations. Today, the strategic passage faces greater uncertainty than at the outbreak of the conflict, according to Jim Burkhard, vice president and head of crude oil research at S&P Global Energy. He noted that while Iran continues efforts to assert full control over the strait, the U.S. has failed to reestablish pre-war shipping norms, making a full return to baseline operations increasingly unlikely.

Recent demand data underscores the severity of the slowdown. Global average oil demand hit 97.9 million barrels per day in May 2026, a 5.3 million barrel per day drop from the same period one year prior. The steepest declines have been concentrated in Asia, a region heavily dependent on Middle Eastern energy imports. China alone accounts for a 1.5 million barrel per day reduction in demand – a 9% year-over-year drop, the largest of any major global economy.

China’s demand cutback stems from a deliberate policy decision to draw down its large strategic reserves rather than purchase crude at inflated market prices during the spring crisis, Burkhard explained. The country cut its crude import volumes by roughly 50 percent, temporarily halting additions to its strategic petroleum reserve that had previously averaged nearly 1 million barrels per day, according to Daniel Sternoff, senior fellow at the Center on Global Energy Policy at Columbia University. The conflict has also accelerated existing demand trends tied to China’s rapid electric vehicle adoption, which is cutting into gasoline and diesel consumption. Sternoff projects that China could see a permanent reduction of between 500,000 and 600,000 barrels per day in road fuel demand from this transition alone.

Counter to the global trend, the United States has seen unexpected growth in gasoline consumption during the second quarter of 2026, even as average pump prices rose 50% above pre-war levels to top $4.50 per gallon of regular gasoline in May, AAA data shows. Analysts point to two key factors for this anomaly: the share of U.S. household income devoted to gasoline has trended downward for decades, meaning even large price increases have a muted impact on driving behavior for most consumers. Additionally, the ongoing shift from remote work back to in-office office commutes has increased overall travel demand, offsetting any pullback from price sensitivity. “Even though it’s a really political price that people pay a lot of attention to, if you are in the higher quintiles of income in the U.S., you might grumble about it, but you’re not really driving less just because of that increase in prices,” Sternoff said.

The conflict has also created a paradoxical dynamic in global oil pricing that has prevented the sharp price spikes many market observers initially predicted. A fragile ceasefire reached in June allowed stranded tankers to exit the Strait of Hormuz, flooding the market with additional crude and pushing prices lower. Even when tensions escalated again earlier this month, prices failed to spike, as the conflict has settled into a predictable “gray zone” that no longer shocks markets, according to Burkhard. Reduced overall global demand, led by China’s cutbacks, has also kept upward price pressure in check. Additional supply-side constraints have hit downstream markets: multiple Russian refineries have been knocked offline by Ukrainian drone strikes, and Middle Eastern refining capacity remains damaged from the wider regional conflict, leaving refined product prices for gasoline and diesel far more inflated than crude prices. “There’s this gush of supply of crude oil being made available to the market, and there’s simply less demand for that crude oil,” Burkhard summed up.

BERLIN — Global automotive giant Volkswagen has disclosed steep second-quarter sales declines, headlined by a dramatic 30%-plus drop in its largest single market, China, just one day after announcing sweeping restructuring plans that could cut its model lineup by nearly half to counter slumping demand. Headquartered in Wolfsburg, Germany, the company reported Friday that total group deliveries fell 8.6% year-over-year in the three months ending June, reaching just under 2.1 million vehicles. Most of its major premium and mass-market brands recorded double-digit or notable single-digit declines: the core Volkswagen brand saw deliveries drop 14% to just over 1 million units, Audi slipped 8%, and Porsche fell 18%. Outliers included its supercar brand Lamborghini, Czech automaker Skoda, and its commercial trucks division, which all posted modest delivery gains. Regionally, sales also grew across the Americas and Europe, but these gains were not enough to offset the collapse in Chinese demand.

The restructuring announcement came Thursday following a meeting of Volkswagen’s board of directors, marking the next stage of a three-year company-wide “fundamental realignment” designed to adapt to a rapidly shifting global auto market. CEO Oliver Blume outlined that the overhaul will focus on cutting operational complexity, concentrating investment on core automotive technologies, aligning product strategies more closely to regional market needs, and trimming excess production capacity. Blume framed the changes as a necessary response to what he called an “increasingly demanding environment” for global automakers.

Volkswagen specifically called out a series of interconnected industry pressures that have built up over the past 12 months: escalating geopolitical tensions, rising input and operational costs driven largely by new tariffs, stricter emissions and regulatory requirements around the world, and intensifying competition from both established and new market players. As recently as last December, the company was making large, high-stakes investments in China to grow its market share, but local electric vehicle manufacturers have rapidly captured growing market share, leaving Volkswagen scrambling to catch up amid cutthroat competition.

Industry analysts have reacted with skepticism to the company’s restructuring claims. Research firm BernsteinSG noted in a client note published after Thursday’s announcement that Volkswagen’s claim to be extending its technology leadership is likely to draw doubt, given the far faster pace of innovation from the Chinese EV manufacturers that are displacing it in its once-secure Chinese market.

The restructuring plans have also sparked pushback from Volkswagen’s workforce. Hundreds of employees gathered outside the company’s EV-only plant in Zwickau on Thursday to protest the proposed changes, demanding formal job protections and opposing rumored plans to shut down the facility.

HONG KONG – China’s automotive industry is facing a stark divide in 2024, with booming overseas electric vehicle (EV) demand driving explosive export growth even as a prolonged downturn drags down domestic sales, new industry data shows.

Data released by the China Association of Automobile Manufacturers (CAAM) reveals that Chinese passenger car exports jumped 80% year-on-year in June alone, climbing to 905,000 units from May’s 809,000. For the first half of the year, total exports have surged 72% to more than 4.4 million units, a staggering increase that cements China’s position as the world’s top exporter of passenger vehicles. By comparison, domestic passenger car sales over the same January-June period reached nearly 8.3 million units, with 1.5 million sold in June – still a larger total volume than exports, but down 26% from last year’s levels.

Multiple overlapping pressures have weighed heavily on China’s domestic auto market. The crowded, saturated landscape has ignited cutthroat price wars that have squeezed margins and left many potential buyers waiting for deeper discounts before committing to a purchase. A long-running slump in the country’s property sector has eroded household wealth and disposable income, cutting consumer willingness to make big-ticket purchases like new cars. Compounding these headwinds, the rollback of government EV purchase incentives has also dampened domestic demand for electric vehicles.

Global consulting firm AlixPartners projects that total light vehicle sales, which include passenger cars, will drop by roughly 10% this year, as consumer expectations of further price declines push purchase delays across the market. Against this backdrop, expanding into international markets has shifted from an opportunity to a survival imperative for most Chinese automakers. “In China’s highly competitive environment, companies that don’t venture overseas will face immense difficulties in surviving,” Wei Haigang, president of GAC International, the overseas arm of Chinese automaker GAC Group, stated at a June auto expo in Hong Kong.

Leading domestic brands like BYD have already moved aggressively to capture global market share, opening new production facilities in key high-demand regions to scale up output and reduce trade costs. This rapid global expansion has lifted long-term profit outlooks for Chinese automakers, but it has also sparked growing trade tensions with major trading partners.

The divide is particularly clear in the North American market. In a recent positive development for Chinese brands, Canada approved an annual import quota that allows 49,000 Chinese-made EVs to enter the country at a preferential low tax rate, opening a new foothold for Chinese manufacturers. Industry analysts are now closely watching the Canadian market to see if this access paves the way for future entry into the U.S. market, where steep punitive tariffs have effectively blocked most Chinese EV exports to date. Even so, trade barriers continue to harden in some regions: last month, Polestar, the Sweden-based EV brand controlled by China’s Geely Holding Group, announced that the U.S. Commerce Department has banned Polestar from selling vehicles in the U.S. starting from the 2027 model year.

Industry analysts hold largely positive long-term outlooks for China’s auto export growth. Stephen Chan, an analyst with S&P Global Ratings, projects that full-year Chinese passenger car exports will grow between 30% and 50% annually through 2026. AlixPartners forecasts that total Chinese vehicle exports will rise from roughly 7 million units in 2025 to around 10 million units by 2026.

Analysts also note that geopolitical tensions tied to the ongoing conflict in Iran have pushed global gasoline prices higher, which is expected to further boost consumer and fleet demand for electric vehicles worldwide – a shift that plays directly to the strength of Chinese EV manufacturers, who have built significant cost and production scale advantages in the global EV supply chain.