Chinese car makers challenge European industry

author: FutureCar Staff    

Chinese manufacturers are set to make a strong presence at the upcoming IAA auto show in Frankfurt, Germany. This is a significant event in the industry, and it will provide an opportunity for Chinese car makers to showcase their new electric models. German car makers, who have been lagging behind in the e-mobility race, will face tough competition on their home turf. Even Elon Musk's Tesla, which usually avoids such events, will be making an appearance at the show in Munich, aiming to steal the spotlight from Europe's biggest brands.

The automotive sector in Europe, particularly in Germany, is facing challenges. While supply chain problems have improved since the pandemic, European auto giants are struggling with increased energy costs due to the Russian invasion of Ukraine last year. Sales in the European Union have been slowly recovering but remain around 20 percent below pre-coronavirus levels. Inflation and higher interest rates are dampening the demand for new vehicles.

Adding to the pressure, European manufacturers are facing stiff competition from Chinese car makers. Chinese brands are offering vehicles at much lower prices, capturing a significant share of the Chinese market and threatening to dominate the growing trade in electric vehicles. The IAA 2023 is seen as a turning point for the industry, as Chinese groups make their assault on Europe.

The industry fair will have a strong Chinese presence, with 41 percent of exhibitors having their headquarters in China. Brands like BYD and Leap-motor will be hoping to steal the spotlight from German giants Volkswagen, BMW, and Mercedes-Benz. In contrast, participation from other European makers is limited. Opel will be the lone representative of US-European conglomerate Stellantis in Munich, and Renault will only showcase its eponymous marque. Tesla's presence at the IAA is seen as a shift towards traditional marketing for the brand.

The IAA is expected to attract around 700,000 visitors over the week, with activities taking place in exhibition halls and the city center. The focus of the event will be the transition from combustion engines to electric vehicles and the broader climate question. However, climate groups have vowed to protest at the fair, including engaging in civil disobedience to disrupt the IAA. The previous edition of the show faced small-scale protests, and this time around, a camp in a suburban Munich park will host around 1,500 people promoting a "revolution in mobility."

Car manufacturers have faced criticism from climate groups, who argue that their growth imperative is harming people's lives worldwide. The industry's recent massive profits, driven by strong inflation, have further fueled the debate. A growing climate consciousness movement is pitting environmental activists against car makers. In response to changing views on automobiles, the IAA relocated from Frankfurt to Munich in 2021 and rebranded itself as a festival for all forms of mobility, including bikes and scooters. This move was an attempt to rejuvenate traditional motor shows, which have struggled to attract manufacturers and create enough publicity.

The Paris Motor Show in 2022 saw a decline in visitor numbers as it was shortened from two weeks to one. Major European names like Volkswagen, BMW, and Ferrari were absent, while Chinese car makers like BYD made an appearance.

FutureCar Staff