European Automakers' Profits Diverge: China Exposure and Transition Strategies Prove Crucial

Recently, European automakers have shown markedly divergent financial performances, primarily driven by their varying degrees of reliance on the Chinese market and their respective transformation strategies. German automakers such as BMW, Volkswagen, and Mercedes-Benz—each deriving over 20% of their sales from China—have faced profit pressure amid declining vehicle sales in the country. Specifically, BMW reported a 28% year-over-year decline in net profit and an 8% drop in revenue in the first half of 2026, alongside a 20% decrease in sales volume in China during the same period. In contrast, French automakers Renault and Stellantis have demonstrated relatively stable performance, as they rely more heavily on other markets such as Latin America and India. Amid the ongoing transition toward intelligent electrification, some European automakers, despite scaling back or exiting passenger vehicle sales in China, continue to secure technological and supply chain support through partnerships with Chinese companies. Renault has withdrawn from China’s passenger vehicle sales market but collaborates with Geely to leverage China’s automotive industry capabilities and enhance its global competitiveness. Stellantis, whose sales in China and the Asia-Pacific region account for only about 1% of its total, has achieved profit growth by integrating Chinese new energy vehicle technologies—through partnerships with Chinese automakers Leapmotor and Dongfeng—into its global distribution, manufacturing, and operational systems.