On the streets of Europe, cars of Chinese brands are becoming more and more common.
Bloomberg reported, citing data from market research firm Dataforce, that in August this year, Chinese car brands accounted for nearly 12% of the European new car market, a record high.
Even in Germany, a long-established automobile industry powerhouse, Chinese cars are beginning to make a mark.
Shi Shiwei, a professor at the University of International Business and Economics and director of the Sino-German Economic and Trade Research Center of the Regional Institute of Regional Studies, often travels between China and Germany. He told Sanlihe that Chinese cars were rarely seen in Berlin in the past, but they have become more common this year.
Dataforce data shows that Chinese brands’ share in Germany, Europe’s largest auto market, also reached 6.4% in August.
More and more European consumers are discovering that Chinese cars seem to be really good.
Behind the record high share, the European auto market is quietly shifting gears.
In August, new car registrations in the EU increased by 5.3% year-on-year, but it was electrified models that really drove the market. The registrations of pure electric, plug-in hybrid and ordinary hybrid vehicles increased by 52.2%, 13.5% and 3.4% respectively, accounting for more than 70% of all new car registrations.
"High oil prices, Europe's goal of banning the sale of fuel vehicles by 2035, and car purchase subsidies from many governments have made Europeans begin to turn their attention to electric vehicles." Shi Shiwei said.
Take Germany as an example. In January this year, the German government announced that it would provide subsidies of up to 6,000 euros to families purchasing new electric vehicles.
The turbulent situation in the Middle East has pushed up the international oil price from more than 50 US dollars per barrel to about 100 US dollars today, further increasing the cost of using fuel vehicles.
But more importantly, Chinese cars have just grasped the key needs of the changing European automobile market: price, technology and experience.
From April to August this year, the share of Chinese brands in the European new car market has increased for five consecutive months, and has continued to set new records: it reached 9.8% in April, exceeded 10% in June, rose to 11.2% in July, and further rose to 11.7% in August.
Chinese car companies are rapidly iterating in areas such as batteries, electric drives, smart cockpits and assisted driving. With a complete industrial chain and economies of scale, it has also brought more competitive costs to Europe.
Citing a survey of industry leaders, Bernstein said respondents generally believed Chinese manufacturers were five years ahead of their Western counterparts in electric vehicle technology.
As intuitive as sales is consumer recognition. A survey of European consumers released by McKinsey in July this year showed that cost-effectiveness, innovation capabilities, and technical advantages in advanced driving assistance systems are important reasons why respondents pay attention to Chinese brands.
54% of European respondents believe that Chinese car brands are leading in pure electric technology, and 40% believe that they are leading in plug-in hybrid technology.
This also explains an interesting phenomenon: it is not only pure electric vehicles that have allowed Chinese cars to quickly find breakthroughs in the European market.
In August, Chinese brands accounted for one-quarter of all hybrid vehicle sales in the European market; among plug-in hybrid vehicle sales, the proportion reached one-third.
There are both market and policy reasons behind this.
On the one hand, for European consumers who are worried about battery life and charging facilities, hybrid power provides a relatively easy-to-accept transition solution.
On the other hand, plug-in hybrids happen to avoid the additional EU tariffs on Chinese-made pure electric vehicles. However, Germany and other EU countries are considering extending restrictions to the plug-in hybrid field.
"Trade restrictions cannot really stimulate the development of European industries. Restricting imports cannot solve the problems of the European automobile industry itself - high costs, slow delivery, dependence on the fuel vehicle industry, and backward intelligent experience. These are Europe's problems." Shi Shiwei pointed out.
Real competition ultimately comes back to the industry itself.
For European car companies, what they need to face is how to reduce costs, improve efficiency, and accelerate electrification and intelligent transformation; for Chinese car companies, the test of the European market is far from over.
McKinsey's survey shows that although European consumers are increasingly interested in Chinese cars, brand recognition, after-sales service and distribution networks are still shortcomings that Chinese brands need to make up for.
The market is changing, the data is changing, and the rules are changing, but consumers are always willing to pay for more suitable products.
Record sales are just the beginning. For Chinese cars, what is important is not only the speed of market development, but also the brand's "life" capability.
