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China's auto market in June: Weak demand for ICE cars drags down German joint ventures, waiting for new models to save the market (Goldman Sachs)

2026-07-11·ima-daily5min-0711-11-37fd43dc88

Street Signal | China's auto market in June: Weak demand for ICE cars drags down German joint ventures, waiting for new models to save the market (Goldman Sachs)

The June China retail sales report released by Goldman Sachs focuses on European car companies. The report reveals a cruel reality: the shrinkage of the internal combustion engine (ICE) market is seriously dragging down the sales of German joint ventures (such as SAIC Volkswagen, BMW Brilliance, and Beijing Benz).

Its data shows that ICE's market share is declining at an unprecedented rate. At the same time, although the overall penetration rate of new energy vehicles (NEVs) has reached a historical high of 62.9%, monthly sales in June still fell 9.4% year-on-year, showing that the demand in the overall automobile market is not very strong.

For German car companies, there is no way out of the predicament until their new-generation electric vehicle platform (such as PPE) products are put on the market on a large scale. There is a consensus in the market that German car companies are in trouble in China, but the decline may be faster than expected.

One sentence conclusion: The sales dilemma of German joint ventures is essentially the end of the ICE era. In the absence of competitive new electric vehicle products, its sales and profits will continue to be under pressure. Good/bad: Bad for the stock prices and supply chain companies of Volkswagen, BMW, Mercedes-Benz and their joint ventures in China.

The market is generally pessimistic, but there are huge differences on whether there will be opportunities for a "defeat counterattack" in the future. Catalysts:

1) The launch pace and market response of new German brand cars (especially high-end pure electric vehicles) in the second half of the year;

2) Whether the Chinese government will introduce policies to stimulate the consumption of fuel vehicles;

3) Whether the market share of German joint ventures can be stabilized in the short term.

Full text

China's auto market in June: Weak demand for ICE cars drags down German joint ventures, waiting for new models to save the market (Goldman Sachs)

The June China retail sales report released by Goldman Sachs focuses on European car companies.

The June China retail sales report released by Goldman Sachs focuses on European car companies. The report reveals a cruel reality: the shrinkage of the internal combustion engine (ICE) market is seriously dragging down the sales of German joint ventures (such as SAIC Volkswagen, BMW Brilliance, and Beijing Benz). Its data shows that ICE's market share is declining at an unprecedented rate. At the same time, although the overall penetration rate of new energy vehicles (NEVs) has reached a historical high of 62.9%, monthly sales in June still fell 9.4% year-on-year, showing that the demand in the overall automobile market is not very strong. For German car companies, there is no way out of the predicament until their new-generation electric vehicle platform (such as PPE) products are put on the market on a large scale. There is a consensus in the market that German car companies are in trouble in China, but the decline may be faster than expected. One sentence conclusion: The sales dilemma of German joint ventures is essentially the end of the ICE era. In the absence of competitive new electric vehicle products, its sales and profits will continue to be under pressure. Good/bad: Bad for the stock prices and supply chain companies of Volkswagen, BMW, Mercedes-Benz and their joint ventures in China. The market is generally pessimistic, but there are huge differences on whether there will be opportunities for a "defeat counterattack" in the future. Catalysts: 1) The launch pace and market response of new German brand cars (especially high-end pure electric vehicles) in the second half of the year; 2) Whether the Chinese government will introduce policies to stimulate the consumption of fuel vehicles; 3) Whether the market share of German joint ventures can be stabilized in the short term.

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