2024-03-03 15:50:56
The influence of Chinese manufacturers is growing on the European market. What does this mean for the German auto industry?
Freighters carrying car deliveries from all over the world often arrive in Bremerhaven, but this week a freighter operated by a car company itself docked for the first time. Around 3,000 electric cars were unloaded for the German market. The manufacturer is the Chinese company BYD, which is declaring a price war on German and European car manufacturers. A total of eight ships are currently planned.
Although the car giant is already the world’s largest manufacturer of electric cars, it is still largely unknown in Germany and Europe. Thanks to extensive subsidies in China, the models from BYD and other Chinese manufacturers can be offered significantly cheaper. This is putting German companies in particular in distress after the federal government recently canceled subsidies for e-mobility. Will competition stimulate business or should German car manufacturers be afraid?
Car sales are declining
A German company that has so far been a market leader in the sale of electric cars is Volkswagen. VW is also aware of competition from China: “We take the Chinese suppliers seriously. Just like we did with the Japanese and Koreans,” company spokesman Christoph Oemisch tells t-online. The group welcomes the competition. The German company doesn’t seem to be worried yet.
Sales of cars in Germany are declining. The Central Association of the German Motor Vehicle Industry (ZDK) assumes there will be 2.65 million new cars in Germany in 2024. What sounds like a lot is worrying the industry. There are 200,000 fewer cars than last year.
According to experts, the reason for the decline is probably the stop in government subsidies for electric cars. “That unsettled customers,” says Ulrich Köster from ZDK t-online. Last year the number of orders fell by at least 20 percent. This was confirmed in January 2024.
The funding was originally supposed to come from the Climate and Transformation Fund (KTF). However, this was canceled following the budget ruling of the Karlsruhe Federal Court of Justice.
So far only a small part is made in China
However, only a small proportion of the vehicles sold in Germany come from Chinese manufacturers. Ulrich Köster says: “The sales and service networks are still being developed. It remains to be seen what place the Chinese brands will find in a currently challenging market environment.”
The German automotive industry is an impressive and innovative sector.
Spokesman of the VDA
In general, a strong competitor on the market is not a stab in the back. According to a spokesman for the Association of German Car Manufacturers (VDA), the competitive situation is positive for consumers. In addition, the German automotive industry has been successfully facing competition for decades.
“The German automotive industry is an impressive and innovative sector that thinks sustainability and digitalization together, develops future technologies and advances the change to climate neutrality,” said the spokesman. That’s why Chinese manufacturers, for example, installed German technology in their vehicles.
German industry wants to invest
“Six out of ten e-car buyers in Germany choose a model from a German manufacturer. And the model range is constantly being expanded so that there is something for every need and every budget,” the spokesman continues. To achieve this, the German automotive industry will invest around 280 billion euros in research and development worldwide between 2024 and 2028. In addition, another 130 billion will be spent on building and converting factories.
According to the VDA, in order to keep up with China, car manufacturers also need political support in Germany. China is already one step further and provides comprehensive support through subsidies. The Chinese government has been promoting the purchase of electric cars since 2010. These include battery-operated and hybrid-powered ones. The selling price of the F3DM model from Chinese market leader BYD fell by a third, from around 150,000 to 100,000 renminbi. Today that corresponds to a final price of around 13,000 euros.