China car companies shocked Munich Auto Show.

If the Frankfurt Motor Show with a history of more than 70 years represents the glory of the traditional automobile industry, then as a "successor", the 2023 Munich Motor Show, which kicked off last week, shoulders the heavy responsibility of showing the current transformation and innovation of the automobile industry to the global audience. This is an important platform to show the transformation and innovation of the automobile industry, and it is also the largest auto show in Europe and Germany. Here, you can not only see the latest products and technologies of European local brands, but also witness the strong rise of China brands.

More than 50 Chinese enterprises in three categories participated in the exhibition.

According to the exhibitor information officially released by Munich Auto Show, there are more than 700 exhibitors at this auto show, among which there are more than 50 overseas enterprises in China auto industry, which can be divided into three categories: complete vehicle, battery electric drive electronic control, charging and intelligent automotive electronics and software.

Among the most concerned vehicle brands, besides "old acquaintances" such as MG and Tucki, there are also "new faces" such as Zero Run and Aouita.

Specifically, BYD’s booth has surpassed Mercedes-Benz, with an area of 915 square meters, which is the largest among all exhibitors. At the same time, six new energy vehicles were unveiled, including BYD SEAL (named SEAL overseas), Song PLUS EV Champion Edition (named SEAL U overseas), Yuan PLUS (named ATTO 3 overseas), Seal, Han and Tengshi D9. In addition to BYD, the zero-run car also made eye-catching at this Munich Auto Show. It not only released the latest technical architecture of LEAP3.0, the latest achievement of eight years of global self-research, but also released the first global model C10 based on this architecture.

At the same time, Xpeng Motors also boarded this world-renowned international auto show for the first time with Tucki G9 and international version P7i, and announced that it will land in the German market in 2024 and more global strategic plans. On July 26th this year, the news that Xpeng Motors and Volkswagen reached a strategic and technical cooperation caused a sensation all over the world and aroused strong concern.

Aouita, a brand-new independent brand founded by Changan Automobile, Contemporary Amperex Technology Co., Limited and Huawei, launched its second model-Aouita 12 in the world at this Munich Auto Show, which not only showed its attention and expectation to the European market, but also showed its hope to further expand its brand influence and market share through this model.

As one of the best-selling China automobile brands in Europe, SAIC MG will naturally not miss the opportunity to make a big impact. At this year’s Munich Auto Show, it presented three heavy new cars, namely MG Cyberster, MG4 Electric XPOWER Performance Edition and electric SUV MarvelR.

European enterprises increase investment in China

China brand has completed the role transformation from "participant" to "protagonist" at the Munich Motor Show, and demonstrated its leading strength in the "birthplace of automobiles" with full momentum. The embodiment of this strength is mainly concentrated in the field of new energy. At present, China is already the world’s largest new energy vehicle market, and also the world’s largest new energy vehicle manufacturer. The rapid development of China brand in electrification and intelligence has made the European market see its determination and confidence to go to sea.

The Munich Auto Show is naturally not short of traditional giants. German automakers such as Volkswagen, Mercedes-Benz and BMW all made their debut, bringing the latest models and technologies. A number of senior executives also came to the scene to express their latest views on new energy reform and industry development. The Volkswagen Group even brought a slogan of "China in China" to its hometown, and specially displayed China partners such as SAIC, Tucki and Horizon, emphasizing that it will continue to increase investment in China and work with China enterprises to develop more suitable new technologies.

Audi ag CEO Obermu pointed out that "audi ag has made a clear plan to give China greater autonomy to achieve a more agile decision-making process". Obermou also said that China and North America will be the engines to promote future sales growth, and China market is full of special challenges. At present, the transformation of automobile industry in no part of the world is as remarkable and rapid as that in China market.

Luxury car companies have also put down their lofty posture. Kang Linsong, CEO of Mercedes-Benz, said: "The global economy is facing challenges, but this will not change our long-term commitment to the China market. We will continue to expand our investment in the China market."

Going to sea is not a smooth road.

For China brands, although they have gained a leading edge in the competition with some foreign automobile companies by using more advanced technology, they have made greater breakthroughs in the European market and still face multiple challenges.

The first is the brand awareness and consumer trust in the brand. In recent years, SAIC has gained many consumer initiatives by virtue of MG’s popularity in Europe, which is not applicable to every enterprise. European consumers are always skeptical about new brands and models they don’t know, and there are still stereotypes about China manufacturing.

Secondly, the problems of cost and logistics will also hinder the pace of China enterprises going to sea. Logistics, sales tax, import tax and meeting EU regulations and certification will all increase costs. The process of transporting cars from China to distribution points in Europe through busy ports is tortuous, and the delivery time is long. Generally speaking, ro-ro ships departing from Shanghai Lingang need to drift at sea for nearly one and a half months to reach Rotterdam port in Europe and the Netherlands.

More importantly, the European market is very diversified, and users in different countries and regions also have great differences in demand and taste. For example, in Northern Europe, consumers prefer to buy high-end, luxurious and safe electric vehicles, which is why new energy brands such as Weilai and Tucki choose it as the first stop in Europe. In southern Europe, consumers prefer small, cheap, energy-saving and environmentally friendly electric vehicles. Therefore, if China brand wants to succeed in the European market, it must fully understand and satisfy the needs and preferences of European consumers.

Of course, opportunities always coexist with challenges, and there are also opportunities in the European market. First of all, the demand for electric vehicles in the European market is growing rapidly. Driven by policies and environmental awareness, European consumers’ acceptance and willingness to buy electric vehicles are also increasing.

Secondly, it is very important to choose a good mode. The key to the rapid growth of SAIC sales in Europe and even the global market is to create a differentiated road for China automobile enterprises to "go global". As the first systematic, planned and organized "going global" automobile enterprise in China, SAIC has built a full value chain of the automobile industry including innovative R&D centers, production bases, marketing centers, supply chain centers and financial companies overseas, and its products and services have entered more than 90 countries and regions around the world.

In 2022, SAIC took the lead in becoming the first automobile enterprise in China with annual overseas sales exceeding one million, forming a "100,000-vehicle class" in Europe and five "50,000-vehicle class" overseas regional markets in Australia, New Zealand, America, Middle East, ASEAN and South Asia. This year, SAIC’s overseas sales are expected to reach 1.2 million vehicles, and Europe will be promoted to SAIC’s first "200,000-vehicle class" overseas regional market.

Finally, China brand can accelerate its distribution in the European market by means of technology export and partners. Not long ago, Volkswagen Group announced in-depth cooperation with Tucki and SAIC. The two parties will jointly develop two electric models of Volkswagen brands based on the G9 platform in Tucki; Jetta and Zero Run also heard the news of "holding hands". These cooperations can not only help China brand to improve its popularity in the European market and European consumers’ trust in China brand, but also help it to reduce costs and risks and improve efficiency and effectiveness.