Sieren′s China: Researching traffic jams | News | DW | 10.10.2015
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Sieren's China: Researching traffic jams

After a forced pit stop, China's auto market is gradually picking up again. DW's Frank Sieren says that Volkswagen is more important than ever.

It's become more difficult to buy Volkswagen cars in China as well. However, this is not because of "Dieselgate" but because of the Chinese economy. Just a year ago, the future looked bright, but then sales decreased and for a whole while nothing moved forward. The car industry witnessed some moments of depression that had not been seen since the global financial crisis of 2009.

It was already clear 12 months ago that the economy would not grow by much more than 7 percent. For most German managers in the car sector, it seemed as if they were still in the left lane of the highway but had suddenly without warning driven into a road works section where the speed limit of 100 km/h. Still very fast for an observer, but for the driver this can seem excruciatingly slow.

Comparably high sales figures, still

Audi's sales fell by 12 percent in July, but still sold 42,000 cars - almost as much as were delivered to Italy in the whole of last year. What happened? Different factors led to the lower sales figures. The stock market collapsed, real estate prices fell, exports decreased. All this forced Chinese drivers to take their foot off the gas. On top of that, there was the anti-corruption campaign, which works like speed traps.

Even if a driver is not caught, s/he will enter a state of shock and drive more slowly than allowed for a few kilometers and then slowly increase speed. This is perhaps irrational, but that's how drivers and markets work. Now, things have improved for German auto makers. Audi, as was announced earlier this week, is selling 52,000 cars a month again and witnessing 2.9 percent growth. Some makers are in the left lane with their pedal to the metal again.

China is even more important for VW

Daimler too has stepped on the gas, selling 53 percent more cars in China in September than in the same month last year. But because it missed the boat a few years back and has ever since been playing catch up, it's still only number three among the German luxury brands. Audi remains in pole position and increased its sales by 2.9 percent in September. BMW is sandwiched in between. So Germany's entire luxury car segment is in the race in China.

The mid-level sector can also raise its hopes. The top Beijing regulators have promised to reduce sales taxes for cars with less than 1.6 liter engines and thus go green. This should please VW. It put so much effort into the US market to not be so dependent on China but that backfired somewhat. More than ever, China is the promised land.

DW's Frank Sieren has lived in Beijing for 20 years.