The world is experiencing a race to capture the global automotive market, with China in a strong position due to its impressive electric vehicle production and low cost leadership. The U.S. has imposed protective tariffs and subsidies on domestic cars, while Europe is concerned about Chinese electric vehicles that are reportedly entering the market at low prices. The debate over subsidies and dumping is richly ironic, given that both the EU and the US subsidize their own industries. Tariffs are expected to divide the global automotive market into silos, with Japan and South Korea better positioned. China could dominate in markets outside the U.S. and Europe due to competitive pricing.
The price difference between the BMW iX3 in Germany and in China is striking. While it costs about €67,300 in Germany, the price in China is 405,000 yuan, which is about €51,800. Chinese manufacturers often offer significant price advantages over their Western competitors, influencing competition worldwide.
BMW shares are currently trading at around €96 and have been on a downward trend since July, losing over 15% of their value. Since the beginning of September, however, there have been signs of an attempt to break out of this downward trend. Investors were concerned by the poor quarterly results on August 3, 2023, where the expected EPS was €4.68 but was actually only €4.39 and sales were up only slightly by 0.64%. The future development of the share remains uncertain as the industry is strongly influenced by global political decisions.