Porsche’s Decline in China: The Rise of Domestic Electric Vehicle Brands
Porsche’s sales in China have taken a significant hit, plummeting 42% in the first quarter of 2024. This decline is largely attributed to the rapid growth of China’s domestic electric vehicle (EV) industry, which is increasingly making inroads into the high-end market traditionally dominated by European luxury brands.
The Shanghai auto show, one of the largest international car exhibitions, provided anecdotal evidence of the challenges facing legacy manufacturers. Chinese buyers are increasingly turning to homegrown brands such as Huawei-backed AITO, which offers competitive pricing, advanced technology, and appealing aesthetics.
Song Junqun, a 41-year-old semiconductor industry worker, and his wife, Yu Qiong, were seen eyeing the AITO M9 luxury SUV. The couple considered purchasing a Porsche but ultimately decided against it, citing the AITO’s more advanced technology and lower price point of about 500,000 yuan ($107,000), roughly half the cost of its Mercedes-Benz GLS rival.
“We made many comparisons and found that Chinese cars definitely perform better in the field of intelligent driving,” Song explained.
The rise of Chinese EV brands is not limited to AITO. BYD, which produced its first fully electric car in 2009, is now China’s best-selling car brand and overtook Tesla as the world’s top EV seller in 2024, with sales of over 4.27 million fully electric and hybrid vehicles.
The Chinese EV market is highly competitive, with over 130 domestic brands vying for market share. While this has driven innovation, it also raises concerns about oversaturation and the potential for a market bubble.
James Voortman, chief executive of the Australian Automotive Dealer Association, warns that the Australian market, with its lack of tariffs on imported Chinese vehicles, is particularly vulnerable to this influx of Chinese brands.
“In Australia, we are reaching a dangerous level of oversupply. We have more makes and models than most developed countries,” Voortman cautioned.
As the global automotive landscape continues to evolve, it remains to be seen how legacy brands like Porsche will adapt to the rising competition from Chinese EV manufacturers.
