A 100-Year BMW Legacy Is in Trouble as Germany’s Oldest Dealer Files for Insolvency

Chinese automakers have become a growing challenge for European carmakers in recent years. Now, Germany’s automotive industry has been shaken by the insolvency of the world’s oldest active BMW dealer, Wahl Group, after the company expanded its portfolio to include Chinese brands.

Thomas Wahl, the company’s managing director, represents the fourth generation of his family to run the business. Wahl Group was founded in 1898 as a steelworking shop and began selling BMW motorcycles on January 1, 1923.

Today, Wahl Group operates 31 dealerships and service centers across Germany, selling and servicing BMW and MINI vehicles and motorcycles.

In recent years, the company sought to broaden its brand portfolio. Over the past two years alone, it added 11 brands, most of them from the Stellantis group, along with several Chinese automakers.

Wahl Group began importing and selling Leapmotor, MG, XPENG and MAXUS.

The problems facing Wahl Group

In interviews with German media, representatives of Wahl Group said margins on Chinese vehicles are lower and that Chinese automakers expect European dealers to absorb the costs of logistics, inventory and financing.

Other dealers have made similar complaints, accusing Chinese automakers of poor payment practices and saying that establishing long-term partnerships with them can be difficult.

Dealers, however, cannot pass those challenges on to customers by simply disregarding Chinese manufacturers. They are still required to comply with German consumer protection laws.

German dealers have invested in service equipment, employee training and other resources needed to support new brands. The rapid expansion, combined with the addition of so many Chinese brands, may have weakened the financial foundation of the company.

Wahl Group said sales have fallen sharply in recent years. The decline has now pushed the company into insolvency for the first time in its 103-year history.

The current insolvency proceeding comes with an initial three-month period of state-backed protection. During that time, roughly 1,000 employees will receive wages through state insolvency benefits while the company continues operating.

Restructuring administrators will work on a plan to reorganize the business. There is a significant risk that the process could ultimately lead to widespread job cuts and the abandonment of newly added brands that are losing money.

Wahl Group remains the world’s oldest active BMW dealer, a relationship that dates back to 1923.