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Luxury car sales plummeted in China as consumers face increased pressure from a lagging economy, turning their heads to lower-cost EVs instead.<\/p>\n
Deliveries for luxury brands, including Porsche and Ferrari fell drastically in the first quarter in China, a stark contrast from their performance in the same period last year. Porsche\u2019s first quarter deliveries fell 24% from a year earlier while Ferrari shipments to China dipped 25%. Sales for BMW and Mercedes-Benz also decreased year-over-year, the Wall Street Journal<\/em> reported<\/a>.<\/p>\n The disappointing first-quarter results for luxury carmakers in China partly reflect turmoil in the economy fueled by a struggling real estate sector. Economists have criticized<\/a> China\u2019s attempt to right the ship because the approach focuses more on supporting production and exports than consumer demand.<\/p>\n Lackluster demand has impacted, but so far taken less of a toll on EVs. About 1.03 million EVs were sold in China in the first quarter, which marked a slowdown from continuous growth since the second quarter of 2023, according to government figures<\/a>.\u00a0<\/p>\n But while growth was lower than usual, EV sales were still up 14.7% from a year ago. Sales of \u201cnew energy vehicles,\u201d which include plug-in hybrids, jumped 5.7% year-over-year to a sales figure of 1.71 million in the first quarter. In the U.S., sales of EVs increased by 3%<\/a>, or about 270,000 vehicles, during the same period.<\/p>\n Thanks to price reductions brought on by the entry of new homegrown automakers, EV sales continued to fare better in May. Major automakers such as the Warren Buffett-backed BYD<\/a>, Nio<\/a>, and Seres Group saw strong growth last month, Bloomberg<\/em> reported. Seres Group led the pack by tripling its sales numbers from a year earlier. At the same time, Nio reported a 234% increase in May while BYD\u2019s sales jumped just over 25%.\u00a0<\/p>\n While foreign brands have traditionally dominated vehicle sales in China, lately a flurry of domestic players have sought to capture more of the market. Chinese automakers together surpassed 50% of car sales in the country for the first time in July<\/a>. A decade ago, French automakers such as Citroen, Peugeot<\/a>, and Renault<\/a> cumulatively made up about 4% of China\u2019s market share but have now collapsed below 1%, Bloomberg reported<\/a>.\u00a0<\/p>\n Earlier this year, Tesla<\/a> CEO Elon Musk praised<\/a> Chinese automakers as \u201cthe most competitive in the world,\u201d for their quick growth.<\/p>\n<\/div>\n