Paris Motor Show: the alarm bell was rung, a brutal rivalry began

Europe’s largest car exhibition is being held in Paris at a crucial time. Struggling European automakers must prove they can still compete as Chinese rivals try to gain a foothold in the market.

Europeans are struggling to compete with Chinese rivals’ lower prices and costs and ability to develop new electric vehicles in just two years, at least twice as fast as traditional Western carmakers

– he emphasized compiled by Reuters.

China’s BYD has warned that the EU’s planned tariffs would only lead to higher prices and discourage buyers.

– he said Stella Li is Executive Vice President of BYD to Reuters.

Serge GachotCEO of the Paris Motor Show according to nine Chinese brands, including BYD and Leapmotor, will present their latest models at this year’s event. This is the same as in 2022, when they accounted for nearly half of the brands present.

This year, only about a fifth of the brands are made by Chinese manufacturers, thanks to the much stronger presence of the European car industry – which is a sign that European car manufacturers are determined to protect their home turf.

Earlier this month, EU member states narrowly supported import tariffs of up to 45 percent on Chinese-made electric cars, which the European Commission says are aimed at countering Beijing’s unfair subsidies to Chinese manufacturers. Beijing denies unfair competition and has threatened countermeasures.

Although Chinese carmakers have criticized the EU’s move, they are continuing their European expansion plans and none have so far said they would raise prices to cover the tariffs.

China’s GAC told Reuters on Sunday that the show marked the start of its European ambitions, while compatriot Leapmotor said it wanted to set up 500 sales points in Europe by the end of 2025.

Chinese EV makers such as BYD have so far priced their vehicles slightly below their European rivals, giving them an advantage. This also helps offset the lower domestic margins.

Like Japanese and South Korean automakers, they tout better equipment and offer more features as standard.

Even BYD, which already sells electric vehicles in much of Europe and was a sponsor of this summer’s European Football Championship, is still relatively unknown and hopes to make a big splash with the electric Sea Lion 07 SUV it is launching .

Newer Chinese entrants such as Dongfeng, Seres and FAW are also introducing new models as they look to overseas EV sales to offset a weak domestic market and a fierce price war there.

Europe is also under pressure to keep prices down as EV makers try to catch up with cheaper petrol cars.

he said Tianshu XinCEO of Leapmotor International.

China’s passenger car sales rose 4.3 percent in September from a year earlier, snapping a five-month decline, helped by government subsidies in Beijing to encourage replacement. Meanwhile, European sales fell to a three-year low in August.

Another blow to the electric car market was that The French government announced on Thursday that it will reduce subsidies for electric car buyersand thus joins Germany, which ended its subsidy system at the end of last year.

In the meantime, the proportion of new electric vehicles in the total volume placed on the market fell to 12.6 percent in the first eight months of 2024 compared to 13.9 percent a year earlier in the European Union.

They were almost banned from the United States

Chinese car manufacturers must also perform well in Europe, because they have been almost excluded from the American market. The Biden administration has imposed 100 percent tariffs on Chinese-made electric vehicles and last month also proposed banning key Chinese software and hardware in connected vehicles.

European carmakers, meanwhile, have had a tough time, with Volkswagen, Mercedes-Benz and BMW all issuing profit warnings, mainly due to a weak Chinese market.

Stellantis lowered its earnings forecast due to inventory problems in its American business. CEO of Stellantis, Carlos Tavares on Monday, he did not rule out the possibility that jobs may be at risk in the challenging market and that brands may be sold.

– said Tavares to the French radio station RTL, adding that it depends on the customers which brands have a future.

he added.

Volkswagen is also fighting powerful unions over cost cuts: VW may close German factories for the first time and cut tens of thousands of jobs.