German automakers including Audi, BMW, Mercedes-Benz, and Volkswagen are grappling with dramatically underused factories in China, where local brands now dominate the market.
A new forecast from research firm Mobility Global, prepared for Automobilwoche, indicates that joint venture plants operated by German firms in China ran at less than 50 percent capacity in 2025.
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This year, utilization may drop to 46 percent and slide further to 44 percent by 2030.
In 2010, these same factories were generally operating at full capacity, highlighting how quickly German vehicles have fallen out of favor among Chinese car buyers.
Most consumers now prefer local brands, especially domestic EV makers.
Volkswagen Closes Plants, BMW and Mercedes Weigh Changes
Poor utilization rates have already prompted Volkswagen to close its plant in Nanjing, which it operated alongside SAIC.
The company has also sold its Urumqi site.
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While BMW and Mercedes have ruled out plant closures, sources say they are considering “operational adjustments.”
Reports earlier suggested Mercedes may have paused production of its long-wheelbase electric CLA in China.
Chinese brands, meanwhile, are finding ways to cope with the broader industry slump.
Mobility Global expects average utilization across China's auto industry to sit near 55 percent in 2026, down from roughly 90 percent in 2010.
To offset weak domestic demand, Chinese automakers are ramping up exports, projected to reach 10 million units this year, up from 7 million in 2025.
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They are also building new plants abroad, including in Spain and Hungary, to avoid tariffs and reduce political risk.
