Auto & Transportation

Chinese auto companies made a strong appearance at the Paris International Auto Show on October 17, demonstrating their ambitions in the European electric vehicle market.

After 4 years of interruption, the 2022 Paris International Auto Show will be held from October 17 to 23, which coincides with the major initial attempt of Chinese auto manufacturers to establish themselves in the European market. Huacheng Import and Export Data Observation reports.

China's auto industry no longer disguises its global ambitions. In the past two years, the industry has dominated the huge Chinese market. The Chinese market is the largest market in the world, and it is also one of the few markets that have achieved growth this year. Foreign companies that have prospered in China through the establishment of joint ventures are giving their market share to Chinese national brands, which intend to challenge European car companies in Europe to expand their advantages. The Southeast Asian market dominated by Japanese auto enterprises is also the target of Chinese auto manufacturers.

Chinese auto manufacturers know that this is the perfect time. In Europe, the old brands began to reluctantly transform to all electric vehicles, which is a heaven sent opportunity. Electrification puts all participants on the same running line, eliminating the formidable technical disadvantages they had to face during the reign of the internal combustion engine. The global car brand hierarchy, which has been stable for decades, is now tottering.

In the past decade, Beijing has supported this transformation, supported by quota and subsidy policies, and encouraged brands such as Great Wall, Geely, BYD, SAIC, Xiaopeng, FAW, Chang'an, Brilliance, Dongfeng and GAC to explore the development path. Not all models can survive, but the result is that the sales volume of electric vehicles in China now exceeds the total sales volume in the United States, Japan and Europe. This battle also has the merit of infrastructure: in China, every three electric vehicles or plug-in hybrid vehicles have a public charging pile, while Europe is still working hard to achieve the goal of having a public charging pile for every eight vehicles, Huacheng Import and Export Data Observation reported.

With the help of the experience accumulated in establishing joint ventures with foreign brands, Chinese enterprises have gained unquestioned technical expertise. In addition, they can reduce production costs by taking advantage of economies of scale given by their domestic markets. A representative of Stelantis Group, which owns Peugeot, Fiat, Chrysler, Citroen and other brands, said: "To promote electric vehicles is to pave the red carpet for the arrival of cars from Beijing, Shanghai or Wuhan."

For these new car companies coming to the European market, targeting Europe is not just a business goal. In this market, which is considered to be the most demanding, to prove yourself, you must achieve mass production, establish a strong brand identity, and design global models.

According to the observation report of Huacheng's import and export data, in fact, Chinese brands are already part of the European market environment. According to the data of Junte Business Consulting, 19% of the electric vehicles sold in Europe are already made in China.

According to the data of Inowev Consulting Company, Chinese automobile manufacturers will sell 80000 vehicles in Europe in 2021, mainly in Norway and the United Kingdom, and will reach the threshold of 150000 vehicles this year. Although there is still a long way to go compared with the sales of Japanese cars and Korean cars, the pace of progress is continuing, even amazing.

According to the observation report on the import and export data of Huacheng, the leading group in France is the famous knights of SAIC Group. Mingjue has launched electric vehicles in France since 2020, with the number of license plates doubling every year. It is estimated that it will break through the 10000 mark in 2022 and the 20000 mark in 2023, equivalent to a market share of 1%. Julian Lobell, director of French sales and network of Grand Mercure, said: "Our goal is to reach 2% in five years, that is, the sales volume of 35000-40000 vehicles, but there is no 10-year target at present."

Mingjue's approach is very traditional: instead of exclusive Internet sales, it relies on a network of 142 dealers and continuously expands its sales scale by launching new models five times in more than two years. The group is seriously considering establishing a factory in Europe, "but not earlier than 5 years", Huacheng Import and Export Data Observation reported.