China’s slump is even worse for German companies relying on it for growth — particularly within the auto industry. Luxury car makers are especially at risk. BMW said earlier in the year that it foresees Chinese sales slowing this year. BMW has done well in China in the past — 2012 saw strong double-digit sales growth — but competition from rivals and the economy’s slump have put a damper on the company’s optimism. Chinese domestic luxury-car companies are aiming at BMW and other luxury brands as well, adding another obstacle to BMW’s future success.
One German auto firm that is poised to succeed, however, is Volkswagen. VW has thrived in China, becoming one of the nation’s market leaders and growing its sales rapidly. While a Chinese slowdown could cut back on VW’s sales, the firm’s sizable market share — it had a 20% market share in China earlier in the year — will help VW see through any slowdown in the overall market while holding on to its spot in the industry. If investors are looking for one manufacturing stock in Germany that won’t be slowed down, this is it.
With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn’t be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies.
The article China Drops a Hammer on Germany’s Fragile Growth originally appeared on Fool.com.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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