China Brands Steal The Spotlight At Munich Auto Show

The Chengdu Auto Show has just concluded, while the Munich Auto Show has kicked off in Germany. For Chinese users, although Germany is far away in Europe, this year's Munich Auto Show is quite noteworthy, with "Chinese influence" particularly catching the eye and sparking global discussions.

First, looking at German domestic brands, BBA all launched heavyweight products. BMW's next-generation iX3 made its debut, featuring an all-new design style and leading global electrification technology, making this car highly anticipated. Mercedes-Benz introduced the brand-new GLC EV model, also focusing on new energy. Audi unveiled the Concept C, a pure electric two-seater concept sports car, embracing electrification. Porsche, not to be overshadowed, presented the new 911 Turbo S, which may be equipped with a hybrid system.

In terms of Chinese brands, Leap Motor, which gained significant recognition in the European market after being acquired by Stellantis, has launched the Lafa, a two-door pure electric sedan. Xiaopeng showcased the new P7 at the auto show. Avita presented the world's first emotional intelligent concept car, the ABATR VISION XPECTRA, in Munich. Other brands such as BYD, Deep Blue, and Aion also made appearances at the auto show.

Chinese brands lead global technology trends

At this year's Munich Auto Show, Chinese brands accounted for half of the exhibitors. It is worth noting that every Chinese automaker at the event, without exception, showcased new energy vehicles.

In fact, the same applies to foreign car manufacturers at this auto show, with only a very small number of them showcasing fuel-powered vehicles as their main exhibition models. At the Mercedes-Benz booth, the most eye-catching vehicle is undoubtedly the Concept AMG GT XX concept car, which recently set a 24-hour distance record. Additionally, there are the aforementioned all-electric versions of the GLC and the all-electric GLA shooting brake models.

The Volkswagen booth showcased new energy models such as the Volkswagen ID.2 and ID.2 X concept cars. Even the Korean brand Hyundai brought the IONIQ 2 and an electric SUV model to this auto show. Additionally, electric models including the Polestar 5, the all-electric Porsche Cayenne, and the Skoda Epiq were all unveiled at the Munich Auto Show.

The key point is that BMW's presence at this year's Munich Motor Show was entirely focused on the iX3, indicating that BMW's new phase of development continues to prioritize electric products. Audi's electric concept car shares a similar approach, and coupled with Audi's recent push for electrification in the Chinese market, global electrification will also become one of Audi's new major challenges moving forward.

Interestingly, over the past year, many car companies, including BBA, have announced the postponement or abandonment of their electrification strategies' timelines, opting instead to pursue a dual approach of both fuel and electrification to cope with global market changes. However, at the Munich Auto Show, we witnessed the display of a large number of new energy vehicles, as well as strong promotion of new energy technologies by various automakers. The reason behind this may be the impressive performance of many Chinese new energy vehicle companies at this auto show, which perhaps made established automakers in Europe and even around the world feel the transformative changes in new energy development beyond the Chinese market.

This is also the reason why Chinese car manufacturers can shine brilliantly at the Munich Motor Show. Even when facing the unstable European new energy vehicle market, Chinese new energy vehicle companies are always able to identify the pain points of European users and launch highly competitive products to challenge the European and even global markets.

In addition, over the past two years, the wave of Chinese cars going overseas has been rising steadily, and China has now become the country with the largest annual car export volume globally. This indicates that the success of Chinese brands going international is already a foregone conclusion. Based on the export speed of car companies such as BYD, Chery, and Geely, along with new energy brands under some state-owned enterprises, such as Aion, and companies like Leapmotor, Xpeng, and Xiaomi, Chinese car manufacturers are accelerating their pace in exploring the global car market.

Seeing this, established foreign car companies have had to undergo strategic transformation, not only to reassure themselves in China—the world’s largest automotive market—but also to avoid losing their position in the global market that once belonged to them. This may also be the main reason why this year’s Munich Auto Show has become dominated by new energy vehicles.

To cultivate the Chinese market deeply, sincerity is still required.

In fact, from another perspective, the intense competition in China's car market over the past two years reflects that almost all automakers are putting forth their greatest sincerity to earnestly meet users' needs.

Previously, foreign car companies including BBA were considered "off-brand" in the era of electrification primarily because they failed to demonstrate the same level of commitment as Chinese car companies in fully satisfying their customers.

In response to the "generic brand" accusations, some traditional foreign brands have come up with ways to reverse their reputation. First is Volkswagen, which, after launching the ID.4 and ID.6 in the Chinese market, introduced the more affordable ID.3 model based on the most perceptible aspect for users—price. Coinciding with the boom in the Chinese new energy vehicle market, the ID. series achieved an annual sales figure of over 100,000 units in 2022.

Recently, the Toyota BZ series and Dongfeng Nissan N7 have become the new favorites among foreign brands in the new energy market. In particular, the Dongfeng Nissan N7 has impressed a considerable number of users with its high cost-effectiveness and alignment with Nissan's reputation. In August alone, its sales exceeded ten thousand units, a remarkable achievement for a joint venture brand.

The most challenging aspect for luxury brands like BBA is balancing the value between the brand and new energy products. After all, in the Chinese market, the prices of new energy products keep dropping, allowing for ultra-high configurations at lower prices. However, for luxury brands, lowering their stance to sell cars could potentially harm their brand value.

Therefore, luxury brands cannot focus on cost-effectiveness like Volkswagen, Toyota, and Nissan. Instead, they can only pursue a different market route through designs and configurations that align with the tone of luxury brands.

At this auto show, the BMW iX3 was heavily unveiled, featuring a range of over 900km, a charging speed that adds 350km in 10 minutes, and the new generation of BMW's interior cabin and infotainment system. Coupled with a redesigned overall appearance, the BMW iX3 has been completely revamped from the inside out to illustrate one point: the product's capabilities match the brand's value, and a good product simply cannot be cheap.

Mercedes-Benz and Audi are using the same strategy. The Concept AMG GT XX has just surpassed the 24-hour high-speed ring test mileage achieved by the XPeng P7, aiming to demonstrate that traditional car manufacturers possess core technologies in the new energy sector that are not inferior to, and are actually better than, those of Chinese new energy car companies.

We can see that foreign car companies still have the strength to challenge China's new energy vehicle market, but whether they can succeed may still depend on their attitudes towards the Chinese new energy market. At least from this auto show, it is clear that foreign car makers’ commitment to and pursuit of new energy technologies is not as lackluster as their so-called abandonment of pure electric strategies would suggest. On the contrary, their approach to new energy development is more systematic, and they have more considerations in mind. Perhaps in the future, we will see them making stronger efforts in the Chinese market, rather than maintaining the previous "giving up" state. This could actually be a good thing for China’s new energy vehicle market and Chinese new energy automakers.