German Automakers Shift Focus from China to Poland Amidst Market Changes

The landscape of global automotive trade is experiencing significant shifts as German manufacturers face increasing challenges in the Chinese market. The rise of domestic automotive production in China has led to a notable decline in demand for German vehicles, prompting these manufacturers to redirect their attention to neighboring Poland, where demand for German cars is on the rise.

According to recent data, the German export market in Central and Eastern Europe, along with Central Asia, remains a robust pillar of the country's export economy. In 2024, exports to the 29 target countries of the Eastern Committee rose by nearly one percent, totaling approximately 281 billion euros. This is in stark contrast to the overall decline of 1.0 percent in German exports, with exports to China falling by 7.6 percent to around 90 billion euros as Chinese consumers increasingly favor domestically produced goods.

Poland has emerged as a key player in this evolving market scenario, overtaking China as a significant destination for German exports. In 2024, exports to Poland increased by 3.5 percent, reaching 93.8 billion euros, thus securing its position as the fourth-largest market for German products globally, following the USA, France, and the Netherlands.

The automotive sector has been particularly beneficial for German exports to Poland, with rising demand in the Polish car market driving this growth. Factors contributing to this trend include the increasing importance of company cars as a part of employee compensation packages.

While comprehensive annual figures for individual product categories are not yet available, preliminary data from the first three quarters of 2024 indicate that the automotive industry significantly contributed to the export increase to Poland. Reports from Eurostat reveal that the value of German exports of road vehicles to Poland surged by 8.4 percent, amounting to 9.5 billion euros.

Leading German automakers, including Mercedes-Benz and BMW, have witnessed a notable uptick in their popularity among Polish consumers. In 2024, there were 551,600 new car registrations in Poland, marking a 16 percent increase from the previous year, with private purchases rising by 34 percent. Corporate clients accounted for the majority of new registrations, totaling 376,400 vehicles, an increase of 9.3 percent.

Notably, German brands have seen substantial growth in new registrations, with Mercedes-Benz experiencing a 37 percent increase to 27,900 vehicles, while BMW's registrations rose by 17 percent to 27,100 units. Volkswagen also recorded a 13 percent increase, totaling 38,400 new registrations.

Despite BMW lacking production facilities in Poland, Mercedes-Benz operates a plant in Jawor that manufactures combustion engines and batteries for electric vehicles, with plans to expand production to include fully electric vans. Volkswagen stands out as the largest car manufacturer in Poland, with facilities in Poznan and Wrzesnia producing nearly 250,000 vehicles in 2023.

Furthermore, other sectors are also benefiting from the growing trade with Poland. Exports of sanitary equipment and scientific measurement instruments from Germany have significantly increased, reflecting the rising standards of living and wages in Poland. With a reported wage increase of 11 percent last year, Polish consumers have more disposable income for high-quality products.

The economic boom in Poland, spurred by its EU membership since 2004, continues to foster opportunities for German businesses. The OECD's recent report highlights that Poland's GDP per capita has doubled since 2005, with projected economic growth rates of 3.4 percent for the current year and 3 percent for 2026, presenting a stark contrast to Germany's recent economic challenges.