Audi announced on February 28 that it closed its factory in Brussels, Belgium. The closure will lead to about 3,000 job losses. Last year, Audi decided to shut down this factory. The company will assist employees with local job opportunities. It plans to hold a job fair in April, offering 4,000 positions.
The Audi Brussels factory has a history of over 70 years. Since 2018, it has focused on electric vehicle production. It was once seen as the starting point for the company’s electrification. However, global demand for high-end electric SUVs has declined. This drop has caused a sharp decrease in sales of the flagship Q8 e-tron model. Additionally, high logistics and production costs pose structural challenges for sustainable operations.
The EU plans to eliminate internal combustion engine cars by 2035. However, European consumers resist electric vehicles. High purchase costs contribute to low electric vehicle sales. Last year, Audi delivered over 164,000 electric cars, an 8% drop from the previous year. Last year, BBA sales fell across the board. The rise of Chinese brands pressures joint ventures globally. BBA’s 2024 sales data confirms a key conclusion: losses in one area do not guarantee gains in another. The market share BBA lost in China cannot be recovered globally. In 2024, Mercedes, BMW, and Audi’s total global sales were 2.389 million, 2.451 million, and 1.671 million, respectively. All faced declines compared to 2023. Mercedes and BMW’s sales fell by 4%, while Audi’s dropped by 11.8%. Overall, BMW surpassed Mercedes to remain the world’s top luxury car manufacturer. Audi continues to lag behind in sales. If we consider only the core BBA brands, their global sales last year were 1.983 million for Mercedes, 2.2 million for BMW, and 1.671 million for Audi. Their year-on-year declines were 3%, 2.3%, and 11.8%, respectively.
The main reason for the decline in BBA sales is their poor performance in China, the world’s largest market. Last year, all three German luxury car manufacturers saw significant drops in sales in China. Mercedes sold 683,600 units, BMW sold 714,500 units, and Audi sold 649,400 units. Their declines were 7%, 13.4%, and 10.9%, respectively, all exceeding their global sales drops. Outside of China, the impact of the German economy also hurt BBA sales in their home market. Last year, Mercedes sold 213,500 units, BMW sold 267,300 units, and Audi sold 198,300 units in Germany. Their declines were 9%, 5.3%, and 21.3%, respectively.
BBA faces tough challenges in sales. All three companies struggle against pressure from domestic brands and new energy trends in China. They also deal with weak demand in Germany, unclear electrification policies in Europe, and trade barriers in the U.S. However, each company faces different specific challenges. Mercedes, the traditional leader of BBA, struggles with its profit-first strategy and failures in electrification. Since CEO Ola Källenius took over in 2019, the focus on profit over sales has allowed BMW to surpass it. Mercedes’ global sales are far from the peak of 3.35 million units. Declining sales lead to low capacity utilization, which further limits profit margins. In 2024, Mercedes’ profit engine, the high-end luxury series, sold only 281,500 units, a 14% drop year-on-year, worse than both the core luxury and entry-level luxury series. A bigger issue is the lack of interest in the Mercedes EQ electric vehicles. In 2024, its pure electric sales plummeted to 185,100 units, a 23% decline from 2023. Ironically, Källenius once shouted “all in” for pure electric. Meanwhile, BMW’s CEO Oliver Zipse, who was seen as conservative and resisted going all in on electric, delivered the best electrification results among BBA. In 2024, BMW’s pure electric sales reached 426,600 units, a 13.5% increase from 2023. However, BMW faces more serious quality issues and challenges in the Chinese market. In 2024, BMW recalled at least 1.5 million cars due to issues with the IBS brake system. This recall sparked serious conflicts with its core supplier, Continental Group. BMW’s plans for stable sales in 2024 fell through. After announcing its exit from the “price war” in July 2024, BMW had to bow to the market again and offer larger discounts. This led to a significant decline in BMW’s sales in China, the largest drop among the BBA trio. In contrast, both Mercedes and BMW saw growth in the U.S. market in 2024. Mercedes sold 324,500 vehicles, achieving a 9% year-on-year increase. BMW sold 397,600 vehicles, with a modest increase of 0.5%. Audi, often the third in the BBA rankings, faced challenges. Delays from its parent company Volkswagen’s software subsidiary Cariad affected the launch of the Q6 e-tron. As a result, Audi’s electric vehicle sales in 2024 totaled 164,000, an 8% year-on-year decline. In North America, Audi’s sales reached 241,000, down 13%, making it the only BBA company to experience negative growth in the U.S. Audi’s CEO, Gernot Döllner, labeled 2024 as a transition year. He hopes the upcoming models, including the Q6 e-tron, A6 e-tron, A5, and Q5, will help reverse Audi’s downturn in 2025. Lei Jun posted seven tweets. He called for Tesla to remove its products. He offered a 24K gold carbon fiber logo.