Even Porsche falling behind in China as foreign brands fade

Foreign automakers in China face an increasingly urgent challenge at this year's Shanghai auto show — winning back Chinese buyers while their domestic rivals churn out slick, affordable electric vehicles at a relentless pace.

- NICK CAREY VICTORIA WALDERSEE BRIAN THEVENOT

The world’s biggest automakers have steadily lost market share in recent years as Chinese-brand sales have soared. The destruction of legacy-brand equity is spreading fast from lowand mid-priced segments to luxury automakers now struggling to match Chinese rivals with superior EV drivetrains and a dizzying array of high-tech interior features.

Germany's Porsche — among the world’s most powerful premium brands for decades — has become the new poster child for legacy automaker decline in China. Its sales in the country plunged 42% in the first quarter, an acceleration of previous losses since the legendary sports-car maker hit record China annual sales of 95,671 just four years ago — nearly a third of its 2021 global total.

Unlike other Volkswagen Group brands VW and Audi, which showcased five new electric models at the Shanghai show, Porsche retreated to its petrol-engine heritage. The automaker unveiled two limited-edition variants of its 911 in a display surrounded by vintage examples of the legendary sports car. A lighted sign read: “There is no substitute.”

Chinese customers aren’t buying it. Instead, they're buying increasingly futuristic luxury and sport substitutes from domestic competitors, including BYD’s Yangwang brand and Xiaomi, an electronics and appliances giant that only entered the car business last year. Xiaomi's first car, the electric SU7 sport sedan, caused a sensation with Porsche-inspired styling at a much lower price.

When Xiaomi introduced an absurdly fast, 1,548-horsepower SU7 Ultra variant in February priced from 529,900 yuan ($72,591), it said it racked up about 10,000 pre-orders in two hours, slightly more than the first-quarter China sales of all Porsche models. The least expensive Porsche 911 sells for 1.468 million yuan, or $201,170, in China and has 394 horsepower, according to Porsche's website.

“Porsche is done” in China, declared Tu Le, founder of consultancy Sino Auto Insights.