German Automakers' Exports to China Plunge 25%: Further Decline Through May 2026

Germany's automotive and auto-parts exports to China are deteriorating further. According to official statistics, total exports of vehicles and parts from Germany to China from January to May 2026 amounted to just €4.7 billion (approximately $5.4 billion), down more than 25% year-on-year — extending a continuous downward trend since the peak of €13.6 billion in 2022.

As the world's largest automotive market, China had long served as the most critical profit engine for German automakers. Yet data shows that starting in 2024, vehicles and parts ceased to be Germany's top export category to China — surpassed in share by machinery and electrical equipment. This structural shift reflects a substantive erosion of German brands' dominance in the Chinese market.

Sales of leading enterprises — including the Volkswagen Group and BMW — are shrinking rapidly in China. The Volkswagen Group's Q2 2026 sales in China fell 37% year-on-year, deepening an ongoing crisis. Management is now preparing a large-scale cost-cutting plan: CEO Oliver Blume has proposed cutting 50,000 additional jobs, raising the total workforce reduction target to 100,000; simultaneously, up to four domestic German plants may be shuttered, and plans to cut 50% of the 150 model in total include Porsche, Audi, and Skoda brands.

Luxury marques have not been spared either. Mercedes-Benz and BMW (including MINI) saw their Q2 2026 China sales drop 30% year-on-year; Porsche reported a 32% decline in first-half deliveries to China. Analysts point to rapid advancements by Chinese brands in design, intelligent features, and competitive pricing — compounded by weakened high-end consumer confidence amid China's property sector downturn — as key factors eroding the premium pricing power of German luxury vehicles.

Notably, Chinese automakers are reshaping the landscape through 'reverse exports'. Companies including BYD and Chery are accelerating expansion into European markets with high-value-for-money battery-electric vehicles, becoming a major catalyst for rising EV penetration rates across the region. This shift — from one-way imports to two-way competition and collaboration — has become the new reality of the global auto industry.