According to Christian Kames, who works as the managing director at Lazard, Chinese electric cars are posing a big challenge to the European auto industry. Kames made this statement at the IAA Mobility Conference in Munich, where Chinese companies have significantly increased their presence compared to the previous event.
At the conference, about 40% of the presenters are from Asia. Additionally, the number of Chinese exhibitors attending has more than doubled, going from 29 in 2021 to 75 this year, according to IAA Mobility. In total, there are nearly 750 exhibitors from 38 different countries at the conference.
This surge in the presence of Chinese companies at the conference clearly shows their intention to target the European market as their next big opportunity, as highlighted by Kames.
These statements align with what Chinese automakers have been saying. They’ve emphasized that Europe is crucial to their broader global expansion plans.
On Monday, BYD, supported by Warren Buffet, unveiled its Seal electric sedan for the European market. Meanwhile, Leapmotor, headquartered in Hangzhou, China, has announced plans to introduce its SUV in Europe next year.
Likewise, Xpeng has revealed its plans to start selling its vehicles in Germany in 2024 after successfully entering the markets of Norway, Sweden, Denmark, and the Netherlands.
Brian Gu, the president of Xpeng, stressed the importance of the German market, stating, “We acknowledge that Germany is of utmost importance and sets the highest standards for all car manufacturers, Secondly U.S.” He made this statement on Monday.
Swiss bank UBS has even downgraded the ratings of two major European automakers due to the perceived threat from the growing Chinese electric vehicle market.
European Firms Are Prepared and Eager to Participate
According to Christian Kames, European car manufacturers are fully aware of the competitive challenges posed by Chinese companies.
“They now understand that Chinese automakers are indeed a significant threat. The key question is how they respond,” commented Kames. He further noted, “I don’t think we’re in a situation where they underestimate the capabilities of Chinese companies anymore.”
Renault CEO Luca De Meo stated on Monday that the French automaker is continuously increasing its investments in advanced technologies, with a specific focus on its new electric vehicle unit called Ampere. De Meo is confident that this strategy positions Renault favorably in the global competition.
“We believe we have a strong case and the confidence to reduce costs. This will take time because Chinese original equipment manufacturers (OEMs) started ahead of their European counterparts due to different market conditions in China. Nevertheless, we are ready to actively participate in this competition,”.
Chris Reitermann, CEO of Ogilvy Asia Pacific and Greater China, suggested that China’s progress in the European electric vehicle sector offers valuable lessons for European countries aiming to enter the Asian market.
Evelyn Cheng stated on August 25, “Many multinational corporations have faced challenges because they underestimated the rapid shift to electric vehicles. This serves as a valuable lesson for how multinational companies should manage their operations if they aim to succeed in China.”
“Numerous well-known automotive companies are witnessing a decline in their market share,” he remarked. “Now, most of them have come to the realization that they probably can’t succeed in China on their own. That’s why we’ve seen partnerships like Volkswagen teaming up with Xpeng, and I believe we’ll see more instances of local electric vehicle companies collaborating with multinational corporations.”
Conclusion
Chinese, electric vehicle companies are posing a significant challenge to the European automotive industry, as highlighted by Christian Kames at the IAA Mobility Conference. The increasing presence of Chinese firms in Europe underscores their intent to conquer this market.
European manufacturers recognize this competition and are adjusting their strategies, forming partnerships and investing in new technologies to stay competitive in the evolving global landscape.
