Chinese auto manufacturers, led by BYD, aim to seize the lucrative German market, signaling a surge in their expansion trajectory.

Chinese Manufacturers Make a Splash at IAA in Munich

The International Motor Show (IAA) in Munich has become a hotbed of activity for the automotive industry, and this year is no exception. Chinese manufacturers are making a significant impact, challenging the dominance of traditional German brands with their innovative electric vehicles.

Leading the charge is Changan's luxury subsidiary Avatr, backed by CATL and Huawei. Avatr unveiled the concept car Vision Xpectra at the IAA, a catamaran-inspired electric compact SUV that signifies a focus on technology and lifestyle. Avatr's strategy, like that of XPeng and Tesla, is not just about price but also about offering a unique experience.

XPeng, the world leader in electric vehicles and plug-in hybrids in China, is also making waves in Europe. The company appeared in Munich with great confidence, presenting the updated sports sedan P7. XPeng wants to set a higher price than in its home market, where the sedan is already available for less than 30,000 euros. The P7 competes directly with the Tesla Model 3 and puts pressure on German manufacturers in terms of price.

BYD, another Chinese giant, is the world leader in electric vehicles and plug-in hybrids. Despite achieving only 1,100 registrations in Germany in July, many of which were self-registrations, BYD is rapidly growing its dealer network, with a target of 120 by the end of the year. BYD presented its ninth model for Europe, the Seal 6 DM-i Touring, before the official start of the IAA in Munich. The Seal 6 DM-i Touring starts at around 43,000 euros and avoids full EU tariffs for electric vehicles.

Chery, another Chinese manufacturer, is using a double product strategy for Europe. The company is offering SUVs under the brands Omoda and Jaecoo, which can be either electric or combustion engine models. This strategy could make it easier for European customers to switch and put double pressure on German manufacturers.

Volkswagen is not sitting idly by. The company is aiming to conquer the mass market segment with the ID.Polo at the IAA in Munich. Meanwhile, BMW is showcasing the "New Class" with the iX3, and Mercedes is presenting the electric GLC at the IAA. Changan is also presenting the electric compact SUV Deepal S05 at the IAA, priced at 39,000 euros, and aiming to defend its market share against German manufacturers.

XPeng is also positioning itself as a tech company, promising autonomous driving in series from 2026, humanoid robots, and a flying drone for Dubai. The Chinese manufacturers are indeed putting significant pressure on the European market with their new electric vehicles at the IAA.