This week, Chinese automakers flocked to Europe’s top auto show, and the German media was almost in a state of existential anxiety.
Typically, the IAA offers a biennial opportunity for the country’s most esteemed automakers and suppliers to showcase their most impressive new innovations, wowing visitors and journalists alike.
This time around, however, everyone is talking about one thing only – the potential wave of new EVs from the Far East posing a threat to their own home market.
“IAA Becomes China Show”, One of China’s Leading Business Weekly warnalthough Mirror expected “The German auto industry is facing a serious test.”
The success of Elon Musk’s Tesla has already shamed the country, relegating the likes of Mercedes-Benz and BMW effortlessly Bystanders for their own industry. The last thing they need is for an upstart brand like Wang Chuanfu’s BYD to escape Musk’s price war in China by adding to Europe’s misery.
“We want to be a quality and Brian Yang, BYD’s European manager, said in a statement: interview and business dailyis a German daily closely watched by the country’s corporate elite.
China’s export capacity
According to statistics, China can produce about 40 million vehicles per year sueddeutsche Zeitung. That’s about 15 million more than they actually need, a figure far larger than the size of Europe. private car market. In addition, China also controls 90% of the world’s electric vehicle battery supply through suppliers such as CATL and Guoxuan.
If China can use this advantage to make a car as high-end and affordable as the BYD Seal, other companies in the industry will have no competitive advantage other than relying on brand heritage. But well-respected automakers like Alfa Romeo are proof that goodwill doesn’t last forever.
“China has set its sights on the European market and has the potential to fundamentally change the face of European industry as we know it,” he said. Sigrid de VriesDirector General of ACEA, the European industry lobby group.
put on a brave face
German automakers have thrived over the years on the growth of the Chinese auto market, but over the past decade they have slowly found themselves at a disadvantage.
Li Shufu, the Chinese auto tycoon who founded Geely, becomes the largest shareholder of Mercedes-Benz 2018. At the time, the move was politically provocative, with his own government allegedly warning him not to offend Europeans by adding to his ranks.
Initially, brands such as Mercedes struck multiple deals with local Chinese companies to maintain its global dominance, hoping to partner with some of them to boost the competitiveness of its lagging range of small cars.
Merck sells half of its stake to Li Ka-shing’s Geely clever, the subcompact car brand was once known for its ability to park perpendicular to the street. Meanwhile, BMW turned to Great Wall Motors for help with its electric MINI, Imported from China Starting next year. The deals were considered a win-win at the time.
Volkswagen, once the undisputed king since making a prescient bet into China in 1984, is now forced to strike a $700 million deal with Chinese newcomer Xpeng Motors, hoping to make up for their lack of expertise in connected cars Case.
“Ignore? Collaborate? Simulate?” asks the German business daily business daily in a wide-ranging report released Friday. “German manufacturers are actively looking for ways to respond to new competition.”
delayed tsunami
For years, analysts have predicted that cheap Chinese cars would wash up on Western shores, as imports first from Japan and later from South Korea did.
But too many Chinese brands have cut corners in important areas like performance and, worse, safety, where the 2005 JMC Landwind earned its reputation as a “car brand”. death trap.
Yet while industry watchers scrambled to recalibrate their forecasts, China shifted its focus from trying to copy its Western rivals to turning it around.
First, they were playing a losing game of catch-up by quickly seizing the disruption from the internal combustion engine to electric drivetrains. Right now, only Tesla has any hope of competing with Chinese EV makers on cost, and even then only with its best-selling Model Y.
But just as important is the Chinese brand’s commitment to improving the software experience, which is necessary for people accustomed to meeting most of their daily needs through the smartphone app WeChat, whose dominance even Elon Musk wants to publicize copy it.
In an interview with Handelsblatt, BMW Group CEO Oliver Zipse was brave enough to argue that the Chinese may not be able to build cars to European taste, or they could end up with a car that cannot provide Service after-sales service network.
“Ambition does not equal success,” he said.
But this time, the Chinese automaker offers more than ambition.
Svlook
