In an already fragile global economic context, the Chinese slowdown acts as a shock wave for European companies in sectors as emblematic as luxury and automobiles. While these industries had become accustomed to growth driven by Chinese market appetite, signals from the third quarter paint a gloomy picture. Behind the figures, it is an economic model that is faltering, which leaves room for deep uncertainties about the future of trade between Europe and China.
A Chinese market in decline, European giants in difficulty
Recent announcements from European companies demonstrate a significant impact of the Chinese economic slowdown on their activities. At Volkswagen, the flagship of the German automobile industry, net profits plunged 64% compared to the previous year, with China representing its main market. Mercedes-Benz and BMW, other pillars of the sector, also recorded a drop in sales in this region. These drastic declines can be explained by weakened demand, but also by increased competition from Chinese manufacturers of electric vehicles. Thus, “local manufacturers anticipated the situation through diversification towards the European market”, precise Éric Kirstetter of the Roland Berger firm.
Luxury, long driven by the appetite of Chinese consumers, is also losing momentum. Indeed, the French groups LVMH and Kering, like their Italian counterpart Prada, noted a drop in their sales in the third quarter. Prada CEO Andrea Guerra sums up the situation this way: “The Chinese market is more complicated today and may not improve in the near future.” These statements echo a structural reality. Chinese households, once major consumers of material goods, now favor services.
A structural transformation with global implications
The challenges facing European businesses go beyond unfavorable economic conditions. According to Françoise Huang, economist at Allianz Trade, China is going through a profound change, marked by a slowdown in its once rapid growth. “The periods of very high growth that we have experienced in China over the past decades are a thing of the past,” explains Famke Krumbmüller of EY. This new paradigm is forcing companies to rethink their strategies, especially as Beijing struggles to stabilize its economy in the face of growing geopolitical tensions.
Despite these challenges, opportunities are emerging. In second and third tier cities, the rise of the middle class could offer new life to certain industries. These pockets of growth, although limited, represent an opportunity for companies able to adapt. However, major uncertainties remain, particularly with the protectionist policies announced by Donald Trump, which risk increasing the costs of Sino-European trade.
In this context, the Chinese slowdown, despite new support measures, stands out as a decisive change for Europe. Affected industries will have to adjust their expectations, but also innovate to remain competitive in a rapidly redefining economic world. In the short term, the outlook remains bleak, but strategic adaptation could turn this crisis into an opportunity for reinvention.
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