Competition grows and grows
The next Chinese e-car manufacturer is aiming for the German market
9/4/2023 3:12 p.m
The German auto industry is threatened with an uncomfortable turning point, not least because of the tough competition from China. In particular, the announcement by the Chinese e-car manufacturer Xpeng at the IAA in Munich is likely to be inconvenient for most traditional manufacturers.
The IAA is traditionally the in-house exhibition for German car brands. But in the meantime, the Chinese manufacturers have also been pushing into the European market with increasing demand for electronics. This can also be seen in Munich: This year 40 percent of the exhibitors at the car and traffic fair come from Asia. Industry expert Ferdinand Dudenhöffer from the market researcher Center Automotive Research already smells “the IAA of the Chinese” and a “turning point that makes Europe an interesting market for Chinese electric cars”. The fair is the start of the fight for market share on the continent.
This is also underlined by the announcement of Xpeng. The Chinese electric car manufacturer also wants to launch its vehicles in Germany next year. After some northern European markets, the 2024 models are also to be sold in this country, said Deputy Chairman of the Board of Directors Brian Gu at the IAA. The step into the German market is a big and strategically very important one for the company, which was carefully planned.
“Our success in Germany will determine our success in continental Europe,” Gu said. According to him, it is still too early for information on possible sales figures. Germany manager Markus Schrick added that the carmaker wanted to sell its cars in Germany through dealers and not just online. Xpeng is not initially planning large flagship stores based on the model of electronic rivals such as Nio or Polestar. Xpeng attaches great importance to retailers identifying with the brand and earning money with it. Xpeng manager Eric Xu, responsible for international markets, announced that France should also be added to the provider’s new markets next year. Great Britain should also follow next year if possible.
In Europe, Xpeng is currently represented in Norway, Sweden, Denmark and the Netherlands. The company currently offers the G9, P7 and the G6, which was launched in China in July. Gu advertised above all with the technological competence of the Chinese – around 40 percent of the employees worked in research and development. With a view to sales prices, Xu announced that he wanted to position himself “very competitively” in the market. Xpeng is still a relatively small provider, last year the Chinese delivered almost 121,000 cars to customers worldwide.
Dominating in the People’s Republic is the electro top dog and market leader BYD. Volkswagen recently decided to invest in Xpeng for around 700 million US dollars (650 million euros), thereby buying almost five percent of the shares. The reason is that VW wants to work with Xpeng to develop two mid-range electric models for a Chinese market launch in two years’ time – to date, the Wolfsburg-based company has only had limited success with its electric cars in the world’s largest car market.
According to the assessment of the car expert Frank Schwope, traditional manufacturers must also put their spending to the test in view of the increasing competition from Chinese manufacturers. In terms of price, the manufacturers from the Middle Kingdom would be far ahead of their Western competitors, explained Schwope, lecturer in automotive economics at the FHM Hanover. This is likely to put considerable pressure on the cost structures of the established automobile groups. “Western corporations must significantly improve their ability to innovate as well as their cost structures and, in the future, possibly also cooperate more closely in development work,” recommends the expert. The automotive world is facing an unprecedented disruption as a result of electromobility, but also due to autonomous driving.