A few days ago, 100 Tang models from the Chinese manufacturer BYD have landed in Norway. These cars are the first of the 1500 that the Chinese manufacturer intends to export to Europe this year. But It is not the first Chinese carmaker to offer its models in Europe, nor will it be the last.
The electric car represents a technological disruption in the way the design, production and marketing processes are considered, something that is revolutionizing all world car manufacturers. In the midst of these troubled waters, Chinese manufacturers want to fish a piece of the cake of the European market, offering their products and entering the market, with several strategies.
The electric car represents a technological disruption in which China is ahead
Although we commonly think of Tesla as the epitome of electric cars, the country that has the most manufacturers and where they are sold the most is China. There are also several brands that have been designed to compete with Tesla, NIO being the best known of all, but there are also others that offer more general consumers, who have a less “premium” budget.
The electric vehicle represents a technological change that turns manufacturers around. Let’s start because electric cars go from having an emphasis on the motor (as thermals do) to an emphasis on batteries. In general, the more load capacity in its batteries an electric car has, the greater its autonomy and the lower its disadvantages compared to one with a heat engine. Therefore, if we want to sell electric cars, they better have a good battery.
Batteries are strategic for electric vehicles, being perhaps the component with the greatest added value for the vehicle, when before it was the engine in thermals. European manufacturers, typically German, are undergoing a brutal restructuring, if before the emphasis was on heat engines and that they were more durable, smooth and economical, now it is going to go to batteries and infotainment systems. In other words, technological change implies that companies must be restructured as they are conceived, and all this at great speed.
Old and new brands to sell electric cars
Not many years ago in Europe there was a brand called MG (Morris Garages), a historic English brand that ended up being owned by the late British manufacturer Rover. When Rover went bankrupt the Chinese manufacturer SAIC bought these assets except for the Rover brand that was left in the hands of Land Rover, which had the right to do so. SAIC went on to sell the Rover models under the Roewe and MG brands. Now SAIC has decided to sell its products in Europe through the MG brand.
Their advertising and public relations campaign is being aggressive, they know that it still gives a certain memory of the brand in Europe and they want to take advantage of it. In the United Kingdom when they returned they offered vehicles with an internal combustion engine, but in Spain they directly limit themselves to offering an electric range. And it is that Chinese manufacturers have realized that by changing technology, market brands can change with less effort in the mind of the consumer.
This move to buy a European manufacturer has already been made. Chinese manufacturer Geely did it by acquiring the Swedish Volvo from Ford, more than ten years ago. In addition, it used the division of this manufacturer to launch a new brand focused on electric and electrified vehicles (plug-in hybrids), the Polestar brand, which sells its cars made in China under a Nordic brand. The manufacturer Geely also has the Lync & Co brand, especially focused on those “millennials” who can buy or rent a plug-in hybrid SUV. Lync & Co are already available in Europe. Either in sale or rental mode.
The Chinese manufacturer NIO, considered a Startup or the “Tesla Chino” It is also going to disembark in Europe shortly, starting with Norway where it plans to put battery change stations, which will eliminate the problem of electric car charging times. Given the advantages that electric cars have in Norway and the high purchasing power of the population, it is not surprising that it is being its gateway, as it was for Tesla in the European market at the time.
Returning to MG, they have moved to an aggressive commercial policy, MG is making a strong public relations campaign and also advances government aid to electric cars, so that they “cheapen” its vehicles, some almost at the cost level of a thermal car.
But the brands through which Chinese manufacturers choose to sell their vehicles are not necessarily new or of European origin, we have the example mentioned above of BYD vehicles that have landed in Norway, or as the manufacturer DFSK (DongFeng Sokon), which although the first models it introduced had a heat engine, plans to import electric cars to Spain shortly.
European manufacturers tremble
It is not surprising that European manufacturers are undergoing a strong restructuring in their range to forced marches, if Tesla already gave a scare by temporarily surpassing the sales of German thermal equivalents with its Model 3 model, lhe market introduction of many Chinese brands at the same time can be an onslaught that leaves some uninhabitable giants in trouble.
There are already, yes, electric models in almost all the brands of the large European groups (Volkswagen, Stellantis (the company resulting from the merger of PSA and FCA), Renault, BMW, Daimler and Jaguar Land Rover. But it remains to be seen if they will be able to offer a competitive product compared to the products that are gradually coming from China, when they are offering products from Low-Cost to Premium.
It will also affect non-European brands operating in Europe, basically Ford, Hyundai-KIA, Nissan, Toyota and Honda. It remains to be seen whether these manufacturers will be able to resist the onslaught or some will leave the European market, as General Motors did when closing Chevrolet and selling Saab and Opel to other manufacturers) or Mitsubishi has been considering it after leaving the US.
If any of the great European automotive entrepreneurs (Agnelli, Renault, Daimler, Porsche, Citroën, etc.) raised their heads, they would not recognize the company they founded at all.
Ask the readers Would you buy a Chinese car or do you know someone who has? Do you think that European manufacturers will be able to cope well with the one that comes to them?
Image | Rutger van der Maar
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