German Automakers Face Continued China Earnings Risk -- Market Talk

Dow Jones12-03 17:29

0928 GMT - German carmakers' China earnings remain under pressure, Citi analysts write. With significant China overcapacity, dynamic new model and technology cycles, and low supply chain costs, Chinese manufacturers have undercut EU counterparts and led to sharp falls in European brands' market share and profitability in China. If their China EBIT falls to zero, BMW and Mercedes-Benz have the biggest downside risk to group EBIT in 2026, followed by Volkswagen. Volkswagen can now develop, test, and locally manufacture cars in China. It will soon launch new VW branded cars there which were developed in-country at 40%-50% lower cost than existing models. It is looking at supplying these VWs in Southeast Asia and Middle East markets. "Can VW become a China automotive cost winner, rather than loser?," Citi asks. (dominic.chopping@wsj.com)

(END) Dow Jones Newswires

December 03, 2025 04:29 ET (09:29 GMT)

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Volkswagen can now develop, test, and locally manufacture cars in China. It will soon launch new VW branded cars there which were developed in-country at 40%-50% lower cost than existing models. It is looking at supplying these VWs in Southeast Asia and Middle East markets. \"Can VW become a China automotive cost winner, rather than loser?,\" Citi asks. 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