European companies, in particular Heineken and car manufacturers, face up to the situation in China. Heineken is concerned about the pressure on premium consumers in China and the macroeconomic slowdown. Heineken's initial $3 billion acquisition in 2018 appears not to be paying off in this difficult environment. The Dutch brewer suffered an impairment loss of $874 million on its stake in China's largest brewer.
European carmakers such as BMW, VW, Porsche and Mercedes are also feeling the effects of intense competition in China, with BYD in particular increasing production, outpacing Tesla. These companies are heavily dependent on the Chinese market, accounting for over 20% of their sales and over 30% of their profits. In addition, the transition to electric vehicles is at a standstill, and incentives in the US are increasing, creating headwinds for these manufacturers.
Carlsberg, another major player in the beer sector, is also affected by the situation in China. Despite planned investments in the country, results are disappointing. Consumers, already tested by price rises the previous year, are reaching their limits, which is affecting sales volumes.
The results for the first half of 2024 show widespread disappointment in the consumer sectors, with companies unable to offset price rises by increasing sales volumes.
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