Key facts
- A record 20 Chinese auto brands will exhibit at the Paris Motor Show.
- Chinese brands held 10.7% of the European market in Q2, up from 5.7% a year ago.
- Chinese brands accounted for over 26% of the Western European plug-in hybrid market in Q2.
- Volkswagen is cutting thousands of jobs and considering factory closures.
- BMW is also shedding thousands of workers.
A record 20 Chinese auto brands are set to exhibit at the upcoming Paris Motor Show, highlighting the rapid ascent of Chinese automakers as a significant competitive force in the European market. This expansion comes as European manufacturers face declining sales in China, increased trade barriers, and pressure to electrify their fleets.
The number of Chinese brands at this year's show has doubled since 2024, with established players like BYD and Chery joined by newcomers such as Aito and Avatr. This surge underscores a strategic shift by Chinese automakers, who, facing limited access to the US market and slower domestic demand, are increasingly focusing on Europe.
Data from Schmidt Automotive Research indicates that Chinese brands captured 10.7% of the European market share in the second quarter, a substantial increase from 5.7% a year prior. Their presence in the plug-in hybrid segment is even more pronounced, accounting for over 26% of the Western European market in the second quarter, up from just 2.2% two years ago.
European automakers are responding to this competitive pressure, coupled with weak domestic demand and electrification costs, by implementing cost-cutting measures. Volkswagen is reportedly cutting thousands of jobs and considering factory closures, while BMW is also shedding a significant number of workers. Despite previous EU tariffs on Chinese electric cars, Chinese manufacturers have expanded their offerings to include combustion-engine and plug-in hybrid models.
In response, the European auto industry is advocating for tariffs on Chinese plug-in hybrids, and the EU is developing legislation to mandate minimum local content for EVs to qualify for subsidies. Simultaneously, some European carmakers are exploring partnerships with Chinese firms, such as Stellantis' collaboration with Dongfeng, to utilize underutilized factory capacity and leverage EV technology.
Analysts suggest the Paris Motor Show is a critical platform for European manufacturers to demonstrate their continued strength and readiness to compete. New, more affordable electric models are being introduced, including Stellantis' revival of the Citroen 2CV, designed to meet new rules that allow for reduced features to lower costs. Meanwhile, Chinese brands like Aito aim for significant overseas sales growth, planning to launch four premium electric SUVs in Paris.