Are Chinese brands outpacing Europe’s auto industry?

Anyone heading to the Paris Motor Show this year (through October 23) will be rubbing their eyes in surprise. Especially in exhibition halls, two Chinese companies are spreading themselves instead of French brands. Build Your Dreams (BYD) and Great Wall Motors (GWM) with the Ora brand and luxury subsidiary Wey. Gone are the days when Chinese automakers only drew attention to replicas of popular Western models, lousy craftsmanship or precision crash behavior. The global shift to electric drive renders established brands’ nearly 130 years of combustion engine expertise a worthless model – today virtually any tech-savvy company can produce electric cars at a global level of quality.

Accordingly, new brands from China are going to Europe so fast that European brands may be frightened. Norway is considered the starting point with the e-car boom, but later on, fat car markets such as Germany, France and Great Britain will also be conquered. BYD will launch later this year in Denmark, Germany, Israel, the Netherlands and Sweden. Negotiations are underway in Switzerland with an as yet unknown partner – we can start in 2023. Blick managed to get a spin on the first three models, the Han, Tang and Atto 3 – nothing left of the cheap cars of the past.

Emil Frey’s turn

GWM already has a Swiss company: the second largest importer in Switzerland, but above all Europe’s largest car dealership, the Emil Frey Group will take over the distribution of the Wey and Ora brands in Europe. Let’s start with the noble SUV Wey Coffee 01 and the small car Ora Funky Cat – both, of course, electric. “We are launching Wey in Germany this year with an agency model,” says Thiemo Jahnke, European Marketing Manager. Tools: The customer concludes the purchase contract directly with the manufacturer; The planned 60 bases will take care of test drives, vehicle delivery and service.

First Coffee 01 shouldn’t be on the road until 2023. “It’s faster with Ora Funky Cat,” says Jahnke – it’s expected to launch with 200 dealers in Germany by the end of the year. And in Switzerland? Negotiations with the importer – Blick would have been surprised had it not been for Emil Frey AG – had just begun; Jahnke explains that nothing has been decided yet.

So how do Europeans react to the first serious competition from China? Renault boss Luca de Meo (55) remains calm: “First the Japanese, then the Koreans – and now the Chinese are entering our markets.” He saw this coming five or six years ago: “And more will follow; Also from India or Turkey.” No need to panic: it’s basically always about competition, whether it’s between European brands or on a global scale. The decisive factor is that you can use good products to counter this.

Stellantis CEO worried

Carlos Tavares (64), president of the Stellantis group of 14 brands (including Alfa Romeo, Citroën, DS, Fiat, Jeep, Opel and Peugeot), sees things very differently. He compares competition with Chinese rivals to aviation: “Chinese brands are like low-cost airlines: First, those with 150-euro flights to Mallorca pushed residents out of the market – they can now drive prices up to triple and quadruple.”

Due to their high cost, European brands are currently unable to offer electric cars at the price level of some Chinese brands – if raw material and energy prices continue to rise after the Ukraine war, the middle class of society will soon no longer be able to buy electric cars from Europe. “Then cheap Chinese brands will gain a large market share and replace domestic brands and then dictate prices.”

Are things on the brink?

What bothers Tavares the most is that the European Union (EU) is opening the market entirely to Chinese manufacturers: “In China we have to deal with restrictions and government regulations, in Europe Chinese brands are allowed to do anything – it’s not fair competition!” But: Some Stellantis brands have completely survived the Chinese boom of the past decade – competition from BMW to Mercedes to the VW group is much better in China. Stellantis is even considering withdrawing from China for this reason.

Tavares calls for market restraints and EU defense of the European auto industry – the EU shouldn’t complain later if hundreds of thousands of jobs have to be cut if it doesn’t step up in violation. A strategy that Renault CEO Luca de Meo dislikes: “Protection destroys markets and development opportunities – I learned that in my first semester at university.”

But the next newcomer is already ready: Vietnamese automaker Vinfast is even more European than its Chinese rivals. Since this year it has been exhibiting the new VF7, which has been represented in Germany, in Paris alongside the VF8 and VF9 models. Sales are also scheduled to begin this year in France and the Netherlands; Switzerland will then follow the second wave. And from the design of the Vinfast models, you can already see from which brand you want to win customers: Renault.