German automakers worried about Russia and China image

The European market has finally taken the much-awaited continental recovery into overdrive after a slow start last year, but the German powerhouses are now growing weary of the market developments in regions such as Russia or China.

The European market last month showed its best tally since before the economical crash but the global German players are facing tough decisions when it comes to the collapsing Russian market – once poised to overtake Germany as Europe’s largest – and China’s slowing growth. Even the continental situation is not all rosy – April sales inched 6.9 percent up, jumping 8.2 percent after the first four months. But the Opel and PSA groups lost market share, while Toyota, Hyundai and VW were all down slightly. Russia’s auto market has to fend off economic sanctions, economic decay, lower oil prices and a collapsed local currency. That means deliveries plummeted 41.5 percent last month are down 37.7 percent for the four-month period – with the Moscow-based Association of European Businesses predicting the crisis would not be over just as swiftly as the one after 2009.

Meanwhile, the largest auto market in the world, China, saw its year-over-year growth drop to 4 percent last month from 9 percent in March. Here, Volkswagen has its largest market and could bring a hefty toll on profits if fortunes continue to decline. Meanwhile, even the high-growth premium brands are showing signs of distress, as the local brands have started to gain back lost market share thanks to an infusion of affordable sport utility models.

Via Forbes