Chinese automakers poised to make big gains in Europe

Chinese automakers are also making remarkable strides in the global market, particularly in developing areas such as Latin America, the Middle East and Southeast Asia. Plus, almost every country in Europe has become a target market for different Chinese automakers.

In 2022, Chery sold 1.23 million vehicles globally, with 37 percent being exported outside of China. SAIC’s export quota reached 33 percent.

Consequently, China is on its way to surpassing Germany and Japan to become the world’s largest vehicle exporter. Over the past two years, the total number of passenger vehicle exports from China to the global market has increased by 211 percent, reaching a total of 3.11 million exports in 2022.

So, will battle-hardened Chinese automakers lead future markets and conquer the world?

Chinese automakers have established the building blocks for future competitiveness in EV technology, software, digitalization, factor cost and supply chain areas.

Most Chinese automakers are now launching the so-called ‚Äúdedicated hybrid powertrains’ (a dedicated hybrid engine with a dedicated hybrid transmission), which have tremendous potential in China and global markets. Among them, BYD is the leader with its DM-i dedicated plug-in hybrid technology that offers fuel economy as low as 4.4 liters/100km in for the Song Pro and 3.8l/100km in the Qin Plus, with a combined fuel and electric cruising range of 1,100 km.

The DM-i’s system has well balanced power, fuel economy, and system cost by utilizing the high-power motor and improved thermal efficiency engines.

In-car software and user experience have emerged as crucial focal points for Chinese brands, serving as key differentiators in the market.

Geely, for example, has acquired MEIZU, a renowned technology company specializing in mobile phones and software. This partnership aims to develop the Flyme Auto OS, which is now integrated into the latest Lynk & CO 08 models.

The Flyme Auto OS is positioned to compete with Huawei Harmony OS in both UI design and its array of functions and features.

Nio, on the other hand, places a strong emphasis on “customer focus,” a philosophy that is clearly reflected in the digital experience offered through Nio’s apps and community platforms. Recognizing that software performance and functionality have become crucial game changers, Nio strives to provide a seamless and innovative digital experience for its customers.

Chinese automakers have also made significant efforts to establish a robust and self-sustaining battery supply chain. With the likes of CATL and BYD dominating the battery market, numerous automakers such as GAC, Great Wall, Changan, SAIC and Geely have ventured into creating their own battery subsidiaries.

This strategic move goes beyond the production of battery packs and cells; these automakers are also forming partnerships with upstream material suppliers and investing in the development of next-generation battery technologies.

But the road to success will not be straight for Chinese automakers. Their main challenge will be how to position and price their vehicle in international markets. For example, Nio is attempting to position itself as an upmarket, which raises some skepticism. Additionally, establishing credible and efficient marketing, sales, and aftersales networks in international markets is crucial for Chinese automakers. It remains to be seen if they understand local market characteristics and the customer needs well enough to make this work.

Undoubtedly, Chinese car manufacturers have ambitious goals that extend far beyond their domestic borders. The rise of Chinese brands marks just the beginning of a larger reshuffling within the global auto industry.

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