"The Chinese car, once considered a symbol of insecurity, failed in crash tests in the West. Gone are the days. At a meeting of senior executives at Volkswagen's headquarters in Wolfsburg last September, Ralph Brandstadt, VW brand chief operating officer, warned of how strong Chinese rivals have become. He had previously driven a Chinese electric car and impressed him. Chinese not only mastered electric drive and digital technology, but also improved quality and workmanship. ”
Chinese car exports to Europe have doubled.
Germany's Der Spiegel magazine reported on May 1 under the headline "China's self-made billionaires are attacking the Western auto world" that simple stealing ideas have become a thing of the past, and China is rapidly developing into a technology pioneer. Carmakers such as Geely, Niolai and Xiaopeng are making efforts in Europe – and German companies have sounded the alarm.
For a long time, Volkswagen headquarters has been circulating a "terrible scene": while Volkswagen's market share in China continues to decline, Chinese car brands are gradually occupying the German market. Electric vehicle manufacturers such as Xiaopeng, NIO or the Swedish-Chinese joint venture Polestar already have representative offices in Europe and are ready to strike.
Model car at the German Motor Show.
"The success of Chinese competitors is challenging the entire German automotive industry." The article states. Volkswagen, BMW and Mercedes-Benz rely on China, where 30 to 40 percent of cars are sold. Now, Chinese automakers sell not only in China, but also in the Western market. Young but established manufacturers such as Geely and new entrants such as NIO and Xiaopeng have not been intimidated by the serious COVID-19 crisis. They see the transformation of electric vehicles as an opportunity to completely restructure the balance of industrial power. The companies, backed by ambitious self-made billionaires, symbolize the rise of China's auto industry.
China has been the largest sales market for automakers for many years. In 2021, China registered 21 million new vehicles, compared with nearly 15 million in the United States and only about 12 million in Europe, of which 2.6 million in Germany. Beijing also sees the "electrification transformation" as an opportunity to finally bridge decades of international competition.
China's auto market is the largest.
Aoki observed that while car sales across Europe have stagnated for months, manufacturers from China have seen a huge boost over the same period.
According to analyst firm Jato Dynamics, Chinese manufacturers more than double their car sales in Europe to about 66,000 units in 2021. If you add European brand cars that Chinese own and roll off the production line in China, the sales of Far East Motors will exceed 90,000 units last year. The upward trend will continue in 2022: nearly 13,000 units were sold in January and February alone.
Chinese brands are next to Mercedes-Benz at the German Motor Show.
The market share of Chinese cars in Europe is still at 1.2%. But on a global level, Chinese factories already represent enormous production capacity: Last year, Chinese manufacturers accounted for 28.9 percent of global car sales.
On the road to automotive world supremacy, companies from China and start-ups have adopted different strategies:
State-owned enterprises such as SAIC continue to produce cheap models – mainly for cost-conscious customers in Europe. Other manufacturers are increasingly relying on collaborations with Western partners, but are taking advantage of locally produced prices. There's also a group of young, up-and-coming automotive startups that are heavily valued on the stock exchange and are working on electric vehicles.
Branches of Chinese brands in Norway.
Austria's "Salzburg News" also said on the 5th with the title of "strong current from the Far East", the Chinese car brands most likely to surpass the top European manufacturers include: BYD, Weilai, Great Wall, SAIC and Geely.
There is a good chance that rising Chinese automakers will gain a foothold in international markets. Management consultancy Roland Berger believes that China's electric vehicle industry is a global leader in terms of the number and cost performance of electric vehicles and batteries produced, and that it is at least on par with South Korea and Germany in terms of technology – such as range, efficiency and safety. This is also related to good local infrastructure. Battery manufacturers such as CATL and BYD guarantee the supply chain, and digital groups such as Tencent and Baidu can serve as partners for autonomous driving and the Internet of Vehicles. This significantly enhances the competitiveness of Chinese manufacturers compared to Germany.
Foreign journalists test drive Chinese cars.
William Li, founder of Chinese startup NIO, recently confidently summed up the situation in the German automotive industry, "If they can't fundamentally change the technology and corporate culture, they will be overtaken by new competitors." "Mercedes-Benz, Volkswagen and BMW all seem to be aware of the dilemma. They all work with Chinese suppliers in some way to ensure a presence in their most important sales markets.