Chinese Automakers are Storming through Europe

Chinese automakers have dramatically expanded their sales in Europe over the past year. Brands like MG and BYD are at the vanguard and some of their models are outselling established European brands by some margin. All of this success has not gone unnoticed by regulators in the European Union, EFTA Zone and the UK, where claims that China is flooding the market with cars that are just a little too affordable are starting to be heard.

MG is one of the big winners, with sales of its MG4 firmly on the European Top 40 list outselling the likes of Volvo, Suzuki and Mini. BYD is another top performer with a growing Euro-footprint and selling almost 3,000 cars per month, up from under 200 a month a year ago. The BYD Atto 3 was their big seller with 2,500 shifted, which was more than the Mercedes E-Class and the BMW 5 and 4 Series.

Polestar, the Volvo spin-off who manufactures all of their cars in China now, saw big gains especially in Scandinavia and the Chinese contingent had strong support from the likes of Lotus, Ora, Great Wall, Nio and Xpeng, all of whom reported triple digit sales growth. Data reported by EU customs show a 112% increase for imports from China in the first seven months of 2023.

The demand in Europe for Chinese cars is so high at present that carmakers there are running short of ships to transport the cars in. It may not be all plain-sailing in the future though as European legislators are viewing the invasion rather dimly. The bloc has announced that it will be looking into the policies of subsidies in China that could be the reason for the low costs and have already mentioned adding tariffs which will of course spark a trade-war, but don’t expect a decision on that any time soon.

EU President, Ursula von der Leyen, has already weighed in on the subject saying “global markets are now flooded with cheap electric cars and their price is kept artificially low by huge sate subsidies”, although she didn’t mention China. I think that there is little doubt that is who she was getting at.

Some countries like those crazy Frenchies are already going their own way, with new legislation reclassifying which cars can qualify for a subsidy based on how green the car’s manufacturing process is. Based on the fact that the majority of Chinese manufacturing is fuelled by coal-fired electricity, it is easy to see who the target for this legislation is.

It is not just Chinese brands that will suffer. A number of non-Chinese dependent brands will get caught up in the crossfire. Tesla may have the most to lose. In August alone, they clocked up sales of over 30,000 units for their Model 3 and Model Ys brands. The trouble is these were nearly all made in China and will be the subject of future scrutiny.

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