Automotive News Europe — 2026-07-28
Automotive Industry
Chinese automakers are capturing European market share far faster than industry analysts predicted, prompting sharp upward revisions to long-term forecasts.
Manufacturers including BYD, Chery and SAIC’s MG brand increasingly target Europe as competition intensifies in China and access to the U.S. market remains constrained by tariffs.
Industry observers who once expected Chinese brands to capture about one-fifth of the European market are now reconsidering those assumptions.
“We previously assumed Chinese brands could reach around 20 percent market share,” Martin Benecke, a manager at S&P Global Mobility, said. “Now we are inclined to set that figure considerably higher. Why should they stop at one-fifth of the market?”
Paul Willis, Volkswagen’s former U.K. chief, believes Chinese brands could ultimately account for as much as 30 percent of European vehicle sales,
Chinese automakers will continue to win share primarily by aggressive pricing, Willis told U.K. trade publication Car Dealer Magazine.
Such a pricing battle would increase pressure not only on new entrants but also on Europe’s established automakers, many of which are already struggling with weak electric-vehicle demand, rising development costs and excess manufacturing capacity.
Affordable cars are key
Julian Litzinger, an analyst at Dataforce, said European automakers have few options other than making vehicles more affordable. “The trend will only end when domestic manufacturers seriously begin lowering prices,” he said.
He cited Renault’s Twingo electric minicar as an example of a lower-cost strategy, citing its simplified specifications and limited customization. The Twingo starts at €19,990 in Germany.
Volkswagen has yet to introduce similarly affordable products. “The VW ID Polo is still expensive for an entry-level electric vehicle,” Litzinger said.
The ID Polo, which is larger than the Twingo, costs from €24,995. VW’s Twingo rival, likely to be called the ID1, will go on sale in 2027 starting at about €20,000.
Affordability is becoming a growing concern for consumers. According to Germany’s latest DAT automotive report, 46 percent of respondents worry they may no longer be able to afford a car.
“In the past 50 years, the average price of a new car has increased eightfold, while average annual income has risen only 4.5 times,” Jürgen Hasler, managing director of Germany’s Central Association of the Motor Trades (ZDK), said at an industry event.
Where six months’ salary was sufficient to purchase a new car in the 1970s, buyers today need the equivalent of around 11 months’ income.
Germany lags behind Chinese advance; UK shows future direction
Germany has so far remained relatively resistant to the Chinese advance. BYD, MG and other Chinese brands accounted for just 3.8 percent of new passenger-car registrations during the first five months of 2026.
Germany’s domestic manufacturers continue to benefit from their strength in the premium segment, where differentiation and brand value still allow higher pricing.
Even so, S&P Global Mobility expects Chinese brands to continue gaining share over the coming decade, projecting they could capture as much as 15 percent of the German market.
The U.K. offers a glimpse of what that shift could look like. Chinese brands already accounted for roughly one in six new-car registrations during the first five months, with Chery’s Jaecoo 7 emerging as one of the country’s fastest-growing new models only months after its launch.
For Europe’s legacy automakers, the challenge is clear: matching the cost competitiveness of Chinese rivals without sacrificing profitability.