Chinese automakers are encroaching on Europe's electric and hybrid vehicle market with aggressive pricing. BYD and Chery Automobile Co. posted triple-digit sales growth in January alone, while sales by global automakers, including Hyundai Motor and Kia, are falling fast. In response to the Chinese onslaught, they are also preparing aggressive sales strategies this year, signaling a full-fledged chicken game over electric vehicles.
On the 24th, according to market research firm Dataforce, which surveyed 98% of volumes in the European Union (EU), the United Kingdom, and the European Free Trade Association (EFTA — Switzerland, Norway, Iceland, Liechtenstein), Chinese automakers' market share in January was tallied at 7.4%. That is nearly double the 4.0% recorded in January a year earlier. Notably, this performance came as overall European market sales in January fell 3.6% from a year earlier.
The growth of BYD and Chery was especially striking. BYD sold 17,630 units, up 173% from the same period a year earlier, while Chery sold 17,106 units, up 354%. In Europe, Chery is showcasing four brands, including Jaecoo and Omoda. Geely Group slipped 7.5% year over year to 24,859 units, but three of its six brands — Geely (384%), Lynk & Co (183.2%), and Zeekr (264.5%) — recorded triple-digit growth. Sales of Leapmotor, for which Stellantis Group holds overseas distribution rights, jumped 409%.
By contrast, other global brands are struggling. Hyundai Motor Group sold 69,949 units in Europe in January alone, down 19.4% from a year earlier. They are particularly weak in electric and hybrid vehicles, where Chinese brands have an edge. Sales of Hyundai Motor's Ioniq 5 fell 24.3%. Kia's EV3 (-39.1%) and Niro (-33.8%) also saw sharp declines.
Tesla, which sells only electric vehicles, posted 7,794 units in January, contracting 16.7% from a year earlier. Volkswagen Group, Europe's representative automaker, logged 252,962 units in January, down 4.2%. Weakness at its Volkswagen brand (-11.3%) dragged down the group's total, with the electric "ID" series in particular falling 19%.
The rapid increase in sales of Chinese cars stems from pricing strategy. Chinese brands are slashing prices so aggressively that global brands find it hard to follow.
In Germany, BYD is selling the Atto 2 Boost, a plug-in hybrid subcompact sport utility vehicle (SUV), for €22,990 (about 39 million won). That is roughly 40% below the list price of €38,990, reflecting BYD's own subsidy (€11,500) plus the government subsidy (€4,500).
Automotive trade outlet Automotive News said, "In the U.K., three small plug-in hybrid models — Chery's 'Tiggo 7,' Geely's 'StarRay EM-i,' and BYD's 'Sea Lion 5' — start at £29,900 (about 58 million won), which is more than £10,000 (about 20 million won) cheaper than a comparable Volkswagen 'Tiguan' plug-in hybrid."
The price competition sparked by Chinese cars is expected to continue for the time being. François Provost, Renault CEO said on the 19th, "Price competition has intensified compared with three years ago, and this competition will not ease." Xavier Duchemin, head of Stellantis France, said on the 28th of last month, "This year, Stellantis will pursue a more aggressive sales strategy to restore volumes," and cut the base price of Opel's "Corsa" by 24% to €15,900.