"Porsche at 'Half Price' but Must Buy" German Cars Struggling in China Amidst God-Value Offensive

NYT: "Chinese Competitors Sell Imitated Models at Half the Price"
"Porsche Taycan Deemed Less Competitive Than Xiaomi SU7"
Porsche's Sales in China Drop 28% Year-on-Year

At the '2023 Seoul Mobility Show Press Briefing' held at KINTEX in Goyang, Gyeonggi Province in March 2023, a Porsche exhibition hall was set up.

German automakers are struggling in the Chinese market, losing ground to Chinese companies armed with low-price strategies. In particular, Porsche's sales in China dropped by 28% compared to the previous year.

According to a report by The New York Times (NYT) on the 17th (local time), German car manufacturers, who once achieved high sales in the Chinese market with premium driving performance and precise engineering, are now unable to keep up with the popularity of Chinese competitors.

A representative brand is Porsche. Porsche recently announced that its sales in China last year decreased by about 28% compared to the previous year. Despite increased sales in markets outside China, this impact caused a 3% decline in global sales. Analysts suggest that the decline in sales is partly due to global companies underestimating Chinese manufacturers' electric vehicle production technologies equipped with software and artificial intelligence (AI) capabilities.

Taycan Turbo S. Provided by Porsche Korea

For example, Porsche's first pure electric sports car, the Taycan, is said to be less competitive compared to the Xiaomi SU7. The SU7, which has a similar appearance to the Taycan to the extent that it has been accused of imitation, offers comparable power output and braking performance but is sold at half the price of the Taycan in the Chinese market. Additionally, it has secured differentiation by including integrated AI technologies such as parking assist functions and exploring the driver's music preferences.

Market experts told the NYT, "The advancement of Chinese electric vehicle technology is putting pressure on European automakers, who are accustomed to generating profits through brand value, to strengthen their competitiveness." This means that Chinese consumers are gradually recognizing the high-performance vehicle production capabilities of Chinese companies and are redefining the criteria for 'premium cars' as 'electric, smart, and affordable.'

The NYT also pointed out concerns that tariffs imposed by former U.S. President Donald Trump on trade partners such as the European Union (EU) could further pressure Porsche's performance. Unlike Mercedes-Benz or BMW, Porsche supplies only vehicles manufactured in Germany to the U.S., making it particularly vulnerable to direct impacts.