Global premium brands starting to struggle in China

The sharp decline in fortunes hitting global volume car brands in China is starting to be repeated among premium brands, including Audi, BMW, Jaguar, Land Rover, Mercedes-Benz and Porsche.

Premiums brands typically derive a much greater share of their overall sales from the world’s largest market than than volume players do – more than a third of them in the case of Audi. 

Until recently, they were relatively insulated from the brutal price war being waged by ever-improving Chinese brands fighting to capture market share. Brand power was the protective insulating material. 

However, their sales are skidding downward this year, sending a shiver through boardrooms as executives work out whether this is a blip attributable to the overall lower consumer confidence in China or the start of a longer downward trend.