Munich Auto Show: Heading to Europe to Compete for Business

The residual excitement of the Chengdu Auto Show has yet to dissipate, and the Munich Auto Show follows closely behind. In the eyes of a veteran automotive journalist, the Munich Auto Show (IAA), which evolved from the Frankfurt Auto Show—one of the world's top five auto shows with over 120 years of history—actually falls short of the Beijing, Shanghai, and the recently concluded Chengdu Auto Shows in terms of exhibition area, scale, level, and new cars.

For example, in terms of size, this year's exhibition covers 82,000 square meters, which is less than half of last year's Beijing and Guangzhou Auto Shows (each at 220,000 square meters), and less than a quarter of this year's Shanghai Auto Show (360,000 square meters).

However, because this is the home of BBA, and the current full name of the Munich Auto Show is IAA, which represents transformation and technology, coupled with the influx of the Chinese contingent, this year's Munich Auto Show has both popularity and depth.

The most intuitive impression is that, for the BBA brands, the Munich Auto Show could practically have two messages written on their faces. One is the collective launch of their latest electric vehicles, reflecting strong determination, great ambition, and still holding plenty of good cards in their hands. The other is that their foundations are solid enough; at least, you don't see the kind of anxiety on their faces that is common among the new Chinese players. However, the irreplaceable importance of the Chinese market is also plainly evident.

For Chinese brands and supply chains, the difficulties of the industry have long been deeply ingrained. This time, they are here to put pressure on European car companies, launch an offensive, and seize business opportunities.

Another point is that besides the OEMs, the Chinese contingent also includes major players in the electric powertrain and intelligent driving assistance supply chains, represented by CATL and Horizon Robotics. Their reach has extended to Germany, where they have begun to "heavily invest" in the European local market.

Therefore, the Munich Auto Show has raised two questions: Can the BBA (BMW, Benz, Audi) compete with the new Chinese forces? And to what extent have Chinese brands and supply chains demonstrated their strength in Europe?

Can BBA compete against the new Chinese forces?

BBA all launched their latest electric cars.

On September 4th, Audi unveiled the Concept C in Milan, the design capital, illustrating the brand's new design philosophy and the evolution direction of future products.

On September 5th, BMW's first mass-produced model of the Neue Klasse, the iX3, made its debut in Munich, defining the development direction for the next generation of BMW vehicles.

On September 8th, the all-new pure electric GLC SUV made its global debut.

From an industry perspective, as one peer mentioned, firstly, most overseas competitors are not on the same level as Chinese car manufacturers. Secondly, this year's Munich Auto Show relied entirely on the three German giants, BBA, to save face for the European and American powers.

Technically, both adopt a brand new all-electric platform architecture and support an 800V high-voltage fast charging platform. The core lies in BMW's new generation iX3800V architecture + "driving control brain," equipped with the sixth-generation eDrive and large cylindrical batteries, with an energy density increase of 20% and a range of up to 800 kilometers. The iX3 China version, specially designed for Chinese consumers, will be officially unveiled within the year.

The all-new Mercedes-Benz all-electric GLC SUV features 800V, 320KW ultra-fast charging and offers L2++ end-to-end intelligent driving assistance system. It is equipped with the 8295 chip and integrates ChatGPT's AI capabilities, while in China, it will be equipped with the Doubao system.

It should be noted that during the Munich Motor Show, Markus Schäfer, a member of the Board of Management and Chief Technology Officer of Mercedes-Benz Group AG, revealed that Mercedes-Benz's solid-state battery has already undergone road testing. "They installed a solid-state battery on an EQS, driving from Munich to Sweden, covering more than 1,200 kilometers, and still had over 100 kilometers of range remaining upon arrival."

The ideal is rich, but reality is harsh. Facing the intense competition and rapid iteration in the smart electric vehicle sector in the Chinese market, luxury brands represented by BBA have indeed been in a relatively passive situation in the Chinese market in recent years.

Therefore, can BBA defeat the new Chinese forces?

From a product technology perspective, the advantages are not significant, but Mercedes-Benz’s road testing of L3-level assisted driving and solid-state batteries are points that should absolutely not be overlooked. Furthermore, whether the electric vehicles of the BBA (Benz, BMW, Audi) will be treated as benchmark targets depends on the situation. Tesla’s main models, the Model 3 and Model Y, are the primary benchmarks. If the BBA’s electric vehicles do not enjoy such “privilege” in this round of competition, they are most likely not products of this era.

Chinese brands are going crazy.

The two most intuitive aspects reflected are: firstly, more than one car company has released the "In Europe, With Europe" strategy. Is there a similar scenario of traditional European car companies having a "In China, For China" strategy? Secondly, in terms of scale, more than a dozen Chinese car brands participated in the Munich Motor Show, including BYD, Wenjie, Hongqi, Lingtu, Chery, Dongfeng Motor's Fengxing and Liuzhou Motor, Aion, 212, Leapmotor, Beijing 212, Lingtu Auto, Xiaopeng, Avatr, and others.

Therefore, Chinese brands are collectively heading to Europe to compete for business. Of course, the new car technologies brought by Chinese brands are robust enough.

Only XPeng Motors from the trio of NIO, XPeng, and Li Auto made an appearance. The all-new XPeng P7 made its overseas debut in Munich with a starting price of 219,800 RMB, the same as in China. The car is equipped with an 87-inch AR-HUD, an 8.8-inch instrument panel, and a 15.6-inch three-axis smart central control screen. The new vehicle features three XPeng Turing chips and one Qualcomm Snapdragon 8295P chip.

More importantly, XPeng Motors has announced the official launch of its first R&D center in Europe, with the core theme "In Europe, With Europe," aiming to deeply explore local user needs and accelerate technological innovation and localization.

The all-new model Leapmotor Lafa5 will debut in Munich, built on the Leapmotor LEAP 3.5 modular architecture, equipped with a roof-mounted LiDAR, and supports 800V high-voltage fast charging. Another SUV model based on the LEAP 3.5 architecture, the B10, will officially launch in Europe on the first day of the auto show.

Under Changan's Deepal brand, the Deepal L06 made its global debut, offering both range-extended and pure electric powertrains, equipped with a 3nm automotive-grade cockpit chip and laser radar as standard across all models. The Deepal S05 and S07 made their European debut, with the S05 set to be officially launched in Europe soon.

The all-new Avita concept car will debut at the Munich Motor Show. The new model is positioned as a large six-seat flagship SUV and is expected to be launched in 2026.

Chery, the largest automobile exporter in China, has dispatched an overseas delegation and is employing a global brand strategy with its twin stars Omoda and Jaecoo. The first models to be launched are the all-electric Omoda 5 and the Jaecoo 7 plug-in hybrid SUV, as well as a compact all-electric SUV, the Jaecoo 5 BEV. It is reported that Chery Automobile is expected to officially enter the German market in the fourth quarter of this year.

Supply chain "heavy investment" in Europe

To say that the supply chain is "heavily invested" in Europe is due to its comprehensive involvement and scale. It's not an exaggeration to say that they are collectively going to Europe to grab business.

First is the power battery. CATL, CALB, EVE Energy, and Gotion High-Tech all participated in this Munich Auto Show, and all four companies have either established factories in Europe or are in the process of planning to do so.

CATL unveiled its NP3.0 (No Propagation 3.0) technology platform at Munich, along with the first lithium iron phosphate (LFP) power battery product featuring this technology—the Shenxing Pro. Currently, CATL has established partnerships with more than 90% of mainstream car manufacturers in Europe and has set up three major production bases in the region: Germany, Hungary, and Spain (under construction).

Among the other three companies, Inovance Energy has an annual production capacity of approximately 15 GWh in Europe, Gotion High-Tech about 20 GWh, and EVE Energy's factory in Hungary is also under construction.

Secondly, in the field of intelligent assisted driving, a team composed of smart driving suppliers such as QCraft, Horizon Robotics, DJI, Momenta, RoboSense, DeepRoute, and WeRide showcased China's accumulated achievements and disruptive leadership in intelligent assisted driving to Europe.

Thirdly, in the field of software and electronics, companies such as iFlytek, Kika, Onn Electronics, CheLink, Desay SV, New Vision, Goodix, Guangting, and RoadRover are also flocking in. Having sensed the business opportunity, how could they possibly miss out?

Qi Shi Guan:At this year's Munich Motor Show, Chinese car manufacturers and supply chain companies have started to play the role of "protagonists." Overall, automakers are no longer fighting alone but are forming an ecosystem with the supply chain to implement localization and capture the market, marking a positive beginning.