The Chinese car manufacturers have arrived in Europe. Were names like Xpeng, Nio, BYD & Co. until a few years ago Germany At best, industry experts were familiar with it and were ridiculed, but their glittering, battery-powered luxury class SUVs are now in Munich at one of the continent’s most important motor shows, the IAA Mobility (September 5th to 10th).
“You can now experience the performance of the Chinese automotive industry in the middle of Europe,” says Peter Fintl from the consulting firm Capgemini. The models would thus be presented to the West, so to speak, on their own doorstep. “It will be a life-changing experience for many.” Because the Chinese are presenting themselves with vehicles that sometimes overshadow their Western competition in terms of digitization and autonomous driving functions.
The German manufacturers Volkswagen, bmw and Mercedes Benz are working feverishly not to lose touch with the rapid development with which manufacturers from the Middle Kingdom are pushing ahead. With increasing public awareness of the competitors out China the pressure increases. Fintl refers to the force with which the US group Tesla the industry has rolled out: “Suddenly someone appears whose products have an incredibly innovative aura. Their own range of models, which hasn’t changed technically, suddenly seems outdated, no longer up to date.” As a result, many interested parties make different purchasing decisions. This effect could also exist with the Chinese manufacturers.
However, western car manufacturers are catching up and presenting competitive vehicles. However, they are being held back by rising costs and a weakening economy. The Chinese, on the other hand, benefit from cheap production in their home country and have set up their own battery production, an important competitive advantage. BYD in particular benefits from the fact that the manufacturer also produces innovative batteries in addition to cars. The group from Shenzhen has just ousted VW in China as the market leader in the overall market and is now targeting Tesla worldwide.
Willingness of customers to switch is increasing
According to the Center Automotive Research (CAR), the Chinese are initially competing in Europe with cars in the upper price segment. The reason is that higher and more expensive technical standards apply here for approval. With the exception of the EQS electric sedan from Mercedes, the German manufacturers offer their cars cheaper in China than in Germany. This is also due to the price war there that Tesla launched to gain market share.
Feint believes that the calculus of some managers that Chinese manufacturers could run out of steam in their home market and slow them down in their expansion in Europe is wishful thinking. “Today there are competitors from China, some of whom have 20 years of experience.” SAIC, for example, is one of the top manufacturers in the world.
According to CAR estimates, BYD will produce 2.5 million battery electric vehicles and plug-in hybrids worldwide in 2023 and can thus exploit economies of scale. Tesla believes that two million electric cars are possible this year. SAIC, Great Wall and other brands are “not light years away” from this, says CAR boss Ferdinand Dudenhöffer (72).
Brands from China do not yet play a major role in Germany. According to the industry, that could change soon. “Manufacturers from China will get their piece of the pie in Europe,” says Matthias Pfriem, an electromobility expert at the mobility service provider and consultant PTV. Carlos Tavares (65), CEO of Stellantis, even fears an “invasion” of cheap Chinese electric vehicles in Europe.
How large their share will ultimately be also depends on the willingness of customers to switch. Brand loyalty is declining: According to a McKinsey study, more than half of those surveyed could imagine trying out a new brand when switching to electromobility. When switching to a purely battery-powered car, the figure is even 70 percent.