Many German luxury car manufacturers doubled exports to China in the first half of 2010, and this sales growth has sent profits soaring. China has become the main driving force of economic growth in Germany.
Economic Information Daily reports in the first half of this year, BMW car sales in the United States and Europe were up 4 percent and 6 percent, respectively, while sales in China grew 101 percent to reach 75,600.
In the first half, Mercedes-Benz sales in China increased 189 percent, with a total number of 60,500 cars sold. Over the same period Volkswagen's Audi sales in China grew 64 percent, with about 110,000 sold.
Though German industry as a whole has benefited from exports to China, the country's marquee sector – autos – has profited the most, according to the Wall Street Journal.
Among Germany's big premium car makers – BMW AG, Daimler AG's Mercedes-Benz and Volkswagen AG's Audi – individual car sales to China have soared between 63 percent and 132 percent so far this year.
At BMW, Chinese profitability may have contributed as much as 90 percent of the car maker's 1.3 billion euros in second-quarter operating profits from its auto segment, according to Bernstein Research in London.
Chinese luxury-car drivers gravitate toward pricier, higher-end vehicles with much bigger engines and more options than such buyers in the three automakers' more mature markets.
Analysts estimate that the German automakers of late, particularly BMW and Mercedes, may have been reaping as much as 30,000 euros, or 38,613 U.S. dollars, in profit per car exported to and sold in China. That is roughly 10 times the amount the carmakers typically get in Europe.
In announcing Volkswagen's July car sales, the company's sales chief Christian Klingler predicted that the global auto market would shrink in the second half, suggesting that growth from China and other emerging markets wouldn't be enough to offset declining sales in Europe and elsewhere.
In the first five months of this year, German exports to China increased by 55 percent, roughly equivalent to six times the growth rate of its euro zone exports. The Wall Street Journal said the growth of German exports to China has become the main driving force of German manufacturers to achieve recovery. In the next few months the Chinese economy may be slowing down, which would create a huge impact on Germany.
