Chinese Brands Challenge European Car Industry at Munich Show

The article reports on the growing presence of Chinese brands at the Munich car show, with a focus on the competition between European and Chinese automakers. Chinese brands such as BYD and Geely are showcasing their vehicles alongside European brands like Renault, highlighting the increasing rivalry between the two regions in the global automotive market.

Chinese automakers are gearing up to showcase their latest hybrid and electric vehicle (EV) models at the upcoming Munich car show, marking a significant expansion into the European market. This move comes as Chinese automakers face intensifying competition at home and face trade hurdles in the lucrative U.S. market [1].

The Munich car show, set to take place next week, will feature new models from BYD, Xpeng, and Zhejiang Leapmotor Technology, among others. These companies are broadening their product lines and capitalizing on the gains they've made in recent years. Their push into Europe is driven by the ongoing EV price war in China and the practical closure of the U.S. market due to trade barriers [1].

According to Dataforce, Chinese EVs showed strong performance in Europe during July, with hybrid sales reaching a record 9.7% share. Chinese brands captured 9.9% of the region's EV sales in July, up from 5.3% of the overall car market, the third consecutive month above 5% [1].

The show is happening amidst lingering trade tensions between Beijing and the European Union, which imposed tariffs on EVs imported from China last year. Despite this, Chinese carmakers have continued to grow by introducing more hybrid and combustion models that avoid triggering these duties, forming local sales partnerships, and committing to transfer some production to Europe [1].

Chinese automakers are challenging established European brands like Volkswagen and Stellantis, which are cutting costs to defend their margins in a stagnant European car market. Xpeng, for instance, is bringing a revamped version of its P7 sedan to the Munich show [1].

Julian Litzinger, an analyst with Dataforce, notes that Chinese firms have particularly excelled in the fast-growing hybrid categories, with growth potential still present. "The rise does not seem to be over," he said, emphasizing the potential for continued growth in hybrid models [1].

Meanwhile, Japanese automakers are facing intense competition in Thailand from Chinese car companies. In response, Japanese firms like Toyota and Mitsubishi are introducing low-priced hybrid vehicles (HVs) to regain market share. Toyota's Yaris Ativ HEV, launched in Thailand in August, is priced 10% cheaper than the company's previous cheapest HV, the Yaris Cross SUV [3].

As the EV market expands in Thailand, the ability of Japanese firms to recover their market share with a strategy focused on HVs remains uncertain. BYD, China's top-selling automaker, has aggressively expanded sales through large discounts, reducing the price of its compact car Dolphin by 30% in a recent promotional campaign [3].

In the first half of 2025, 16 out of 23 A/H-share automobile listed companies in China reported profitability, accounting for nearly 70% of the market. BYD, SAIC Motor Group, and Geely Auto maintained their positions as the top three performers, with BYD achieving a revenue of 371.28 billion yuan and a net profit of 15.51 billion yuan [4].

These developments highlight the evolving dynamics of the global automotive market, with Chinese and European automakers increasingly competing for market share and technological leadership.

References:
[1] https://www.scmp.com/business/china-evs/article/3323925/chinese-carmakers-gear-munich-show-ev-competition-heats-home
[2] https://www.scmp.com/business/china-evs/article/3323925/chinese-carmakers-gear-munich-show-ev-competition-heats-home?module=latest&pgtype=homepage
[3] https://asianews.network/japanese-automakers-try-to-regain-ground-lost-to-chinese-car-firms-in-thailand-with-low-priced-hvs/
[4] https://news.futunn.com/en/post/61547328/automakers-semi-annual-reports-70-of-car-manufacturers-achieved-profitability