Electric car: Chinese brands are nipping at market shares in Europe

Chinese manufacturers sold as many cars in Europe between January and June as they did last year, the vast majority of them electric. In particular, attractive prices enable them to convince customers.

Renault, Peugeot but also BYD. The Chinese manufacturer, which counts Warren Buffett among its shareholders, will be at the Paris Motor Show in October, a first for the Paris show but one that underscores an underlying trend. Thanks to rising sales of electric cars in Europe, Chinese brands are gradually eating up market share on the continent.

As many cars in six months as in the whole of last year

According to Inovev, 75,000 Chinese-brand vehicles were registered in Europe in the first half of the year, the vast majority 100% electric, almost as much as all sales of the same brands last year (80,000 units). If the Volkswagen Group (124,000 vehicles) or Stellantis (114,000) dominate the battery-powered car market, Geely and MG still make up more than just the numbers, according to Inovev. The first, in particular owners of Volvo and Lynk & Co, has registered 26,000 vehicles. The historic British brand MG, now part of the SAIC Group, has launched several models in recent months, including the SUV Marvel R, and has sold 18,000 new cars on the European market. And this while they are still confidential to the general public.

“The customers who buy this type of cars are mainly attracted by the lower prices than European electric vehicles in the same segment, even lower than Korean electric vehicles, Inovev specifies in its publication. This customer is put off by the excessively high prices. European.” (and now Korean) manufacturers favor margin over volume, leaving a whole chunk of the market (that of cheapest cars) at the mercy of Chinese manufacturers.

Significantly cheaper models

If you consult the manufacturers’ websites, the difference in price varies between one and two bonuses (6000 euros) for an equivalent model. Without premiums, the ZS, MG’s compact SUV, starts at €30,990, while the Peugeot e-2008 sees its first price at €37,200. And the certainly much larger Volkswagen ID.4 starts at 43,000 euros. Or the equivalent of adding two bonuses. Aside from the Dacia Spring (made in China by Renault), there are few affordable models among the Western generalists that appeal to the second-car market. Chinese manufacturers therefore have a place in Europe. This is what Roland Berger expects in a study published at the end of July.

“Chinese manufacturers should reach one million electric vehicles sold in Europe by 2025,” explains Olivier Hanoulle, a partner who specializes in automobiles within this company. Based on a global market of 20 million cars registered on the continent, including 15% of electric cars, Chinese manufacturers would take a third of the shares of this latter market.”

The four major Chinese manufacturers SAIC, Great Wall, Chang’An and Geely could thus achieve significant market shares on the old continent, which is moving towards zero emissions. According to company estimates, the Geely Group could achieve 42% of its sales outside of China in Europe by 2025 with 252,000 registered cars.

Find new outlets

Paradoxically, these forecasts take into account the state of their increasingly mature home market. “The Chinese automotive market has come to the end of its rapid growth. To move forward, Chinese manufacturers have no choice but to go outside and find growth drivers outside of China. Europe and ASEAN, Southeast Asia are their main outlets,” Olivier Hanoulle continues.

All with a performance in terms of autonomy or charging time comparable to French, German or even Korean models. “Chinese brands got involved with electric vehicles very early, they don’t have the technological lag that they had with the heat engine, notes Olivier Hanoulle. They also don’t have a supply problem because they produce their own components.” As McKinsey reminds us, Chinese manufacturers have other national champions as battery partners, enough to gain competitiveness.

The changes in the European market are also helping new brands. Lynk&Co, for example, sold nearly 1,000 cars to short-term rentals in France in the first half of the year. Enough to make itself known to the general public without necessarily having to go through a network of dealers.

As MG multiplies its outlets — 142 active outlets according to Motorsactu at the beginning of July — other brands can count on an ever-stronger movement among consumers: buy online without even seeing or trying the vehicle. A few months ago, the broker Aramis sold cars from the Chinese manufacturer Aiways directly online. “A brand can be created in Europe if the competitiveness is there,” summarizes Olivier Hanoulle. What BYD wants to flesh out by dropping off its bags at the Mondial de l’Automobile in October.