Published by Global Banking & Finance Review®
Posted on September 10, 2025
4 min readLast updated: January 22, 2026
Add as preferred source on GoogleChinese carmakers are expanding in Europe, using strategies similar to VW. Brands like BYD and SAIC are increasing market share with localized production.
By Nick Carey
MUNICH (Reuters) -Chinese car makers are making inroads in Europe and executives say they are in the region to stay, underscoring a key reversal as brands from BYD to SAIC take market share on a continent where they once struggled to make sales.
At this week's IAA Mobility car show in Munich, China's auto firms - facing a tough price war at home - were increasingly bullish about their plans for Europe, dominated still by local brands such as Volkswagen and Renault.
"Everything we do starts with the needs of European users," said GAC's president of international operations Wei Haigang as the Chinese automaker showed off the Aion V electric SUV that will start sales in Poland, Portugal and Finland this month, and the Aion UT set to go on sale in Europe next year.
"That means being in Europe, for Europe," Haigang added, including "accelerating steps towards localized production."
Chinese luxury brand Hongqi and Chery, China's biggest car exporter for more than 20 years, repeated the same "in Europe, for Europe" refrain in their press events - language that echoed that more commonly heard by German carmakers in China, the world's top market where competition is heating.
Volkswagen's - which has an "in China, for China" strategy - is battling to reverse a 24% drop in sales in China between 2020 and 2024. Rival German brands Mercedes-Benz and BMW are also struggling.
Chinese brands meanwhile are on the rise in Europe. According to JATO Dynamics, Chinese brands almost doubled year-on-year their European market share to 4.8% in January-July.
McKinsey estimate that within a decade, Chinese automakers could command a share equal to what Japanese and Korean automakers enjoy now, of 14% and 9%, respectively.
The rush of Chinese brands portends a likely intense fight for market share. As Chinese automakers are effectively shut out of the United States, the world's third-largest car market has taken on greater importance in their expansion plans.
This year's Munich car show has seen the return of China's top automaker BYD, but also a clutch of new Chinese companies - including GAC, Changan, Aito, Hongqi – all vying for market share outside China where a long EV price war has been killing automakers' profits.
"We are in Europe to stay," BYD's No. 2 executive Stella Li said when declaring that BYD's plant in Hungary will launch production by the end of the year.
'SAME PLAYBOOK AS THE GERMANS'
Almost every press event at the Munich show involving a Chinese automaker included more than one assertion of their European qualifications.
"They're using the same playbook as the Germans in China," said Tu Le, founder of consultancy Sino Auto Insights.
Xpeng vice chairman Brian Gu emphasized the fact that the EV maker is opening a research and development centre in Munich this week, showing the company is "focused on really building for the long-term future with more local investments."
During a video opening a press conference to announce it will launch 15 models in Europe by 2028, Hongqi, a unit of state-owned automaker FAW, intoned that the luxury brand's cars are "crafted for Europe, committed to Europe."
When presenting a new EV, the EHS5, FAW's global design chief Giles Taylor stressed that Hongqi has had an R&D centre in Europe for seven years, "focused on developing cars that will take on the European brief and reach out to European customers."
But Pedro Pacheco, vice president of research at consultancy Gartner, said that so far Chinese automakers are just tweaking Chinese models to meet European tastes.
Toyota's sales in Europe did not take off until it launched the Yaris, specifically designed for the European market, in 1997.
If China's automakers want major growth in Europe, they will need to follow examples and invest in models designed with European drivers in mind.
"Where is that differentiation to suit the taste of the European consumer?" Pacheco added. "That's what is missing."
(Reporting By Nick Carey; Editing by Adam Jourdan and Nick Zieminski)
Chinese brands almost doubled their European market share to 4.8% in January-July, according to JATO Dynamics.
Chinese automakers are committed to localized production and have stated, 'We are in Europe to stay,' emphasizing their long-term plans.
Chinese automakers need to differentiate their models to suit European tastes, as they are currently just tweaking existing Chinese models.
Chinese brands are using strategies similar to German automakers, focusing on local needs and establishing R&D centers in Europe.
The IAA Mobility car show in Munich highlighted the return of major Chinese brands like BYD and showcased their commitment to the European market.
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