BACKGROUND: Chinese brands push into Germany and Europe

MUNICH/BEIJING (dpa-AFX) - Chinese automotive brands are steadily gaining ground in Germany and Europe. In the first quarter, they accounted for approximately 3.1 percent of new registrations in Germany, according to data from the Federal Motor Transport Authority (KBA). While this remains a small share, it is growing rapidly: it stood at 2.4 percent for the full year 2025, up from just 1.7 percent in 2024.

Two brands in particular are currently leading the charge: BYD and MG Roewe, which together accounted for well over half of Chinese new registrations in Germany in the first quarter. European brands under Chinese ownership, such as Volvo or Smart, are not included in these figures.

At the EU level, Chinese brands are even stronger. Figures from the industry association ACEA for January and February - March data is not yet available - show a market share of 1.8 percent for BYD alone, while SAIC (the parent company of MG and Maxus) reached 1.9 percent.

Dealer networks driving sales

"They are applying immense pressure," says Stefan Reindl, head of the Institute for the Automotive Industry in Geislingen. A central element of this strategy is the retail trade, as several Chinese brands have now established relevant and rapidly expanding dealer networks. A few weeks ago, MG Roewe had 180 locations, while BYD had around 155, and these numbers may have already increased, according to Reindl. Additionally, Leapmotor now has approximately 120 locations through a cooperation with Stellantis. "These brands have recognized that success in Germany requires a dealer network for visibility and on-site consulting."

Burkhard Weller, whose Wellergruppe is one of Germany's major car dealers with 42 locations, now offers BYD at 12 sites and MG Roewe at 10, in addition to his core brands BMW and Toyota. "We are very satisfied," he says. "Sales are performing well; customers are coming to us very deliberately and have usually already researched Chinese brands extensively." Both brands approached him. "We looked at it closely and are convinced we have the right partners on board." Other large groups have also added BYD or MG to their portfolios.

Not all will stay

The outlook for further growth for the stronger Chinese brands in Germany is therefore quite positive. However, Reindl expects that not all of those currently entering the market will establish themselves. "I expect perhaps five to six brands - with a total market share of maybe eight to ten percent," he predicts. The German market is demanding and highly competitive - and one should not underestimate the high loyalty and preference for domestic brands. Furthermore, part of their current growth is attributed to high levels of self-registrations by dealers and sales to car rental companies facilitated by steep discounts. Manufacturers use such tactics to boost volume, but they are costly.

On the road, Chinese brands remain relatively rare. Of the 49.5 million cars registered in Germany as of January 1, they represent only 131,000 - or 0.26 percent. However, the trend is rising sharply.

Fierce competition in the home market

In China itself, the pressure on automakers to sell vehicles abroad is mounting. The domestic market remains fiercely contested, with price wars among manufacturers eroding margins. Consequently, the export business is booming, particularly for electrified vehicles.

In March, Chinese automakers shipped approximately 349,000 electric and hybrid cars abroad, an increase of nearly 140 percent compared to the previous year, according to the Chinese industry association CPCA. "Chinese automakers have made significant progress in Germany, and further penetration is to be expected," says Cui Dongshu, Secretary General of the CPCA.

Middle East conflict provides tailwinds

Unrest in the Middle East could further accelerate this trend. "Disruptions in energy markets have fueled global demand for electromobility, especially in Europe and Germany," says Peter Fintl, automotive expert at technology consultancy Capgemini. "The oil price opens the door, and the better product keeps it open." In his view, this means that models have improved noticeably and buyers today get significantly more electric car for their money than they did two years ago.

Nicola Borgo of the consultancy Arthur D. Little also sees an improved starting position for Chinese providers: rising oil prices accelerate demand for electric vehicles, while European producers simultaneously face increased cost pressure.

Beijing Auto Show showcases new models

New models and expansion plans are expected to play a major role this week at the Auto China 2026 trade fair in Beijing.

One headwind comes from the additional EU tariffs on electric cars from China in effect since 2024. So far, however, they do not appear to have halted the advance of Chinese brands in Europe. At the same time, some manufacturers are pushing ahead with production within Europe. This is a trend also observed by industry expert Ferdinand Dudenhoeffer. "China's dominance will be 'exported' in the coming years," he writes in a recent study. "It is a model similar to that of the Japanese 50 years ago or the Germans 70 years ago."

Meanwhile, Lower Saxony's Prime Minister Olaf Lies (SPD), who also sits on the VW supervisory board, has already brought another option into play: building Chinese cars in German VW plants. One cannot prevent Chinese automakers from increasingly pushing into the European market, he told the "Neue Osnabruecker Zeitung." For him, however, the focus is also on securing employment in German VW plants and ensuring capacity utilization at production facilities.

In the meantime, more manufacturers in China are already positioning themselves for market entry in Germany. Expert Fintl does not expect a sudden upheaval, but rather a gradual shift: "Not as a tsunami, but as a rising tide. Slower than hoped for in China, but more sustainable and powerful than feared in Wolfsburg, Paris, or Turin."/jpt/DP/stk