The Beijing motor show will close its doors on Saturday After displaying the very clear ambitions of Chinese manufacturers. In addition to the great wave of Electric vehicles, almost the only models presented in the aisles of the Show, we saw the Tech giant Xiaomi launch its very first vehicle, or even traditional Chinese manufacturers looking for a distribution model tangible.
Above all, several Chinese manufacturers presented very competitive models, between 7,000 euros and 12,000 euros in China. This is the case, for example, of BYD via its Seagull, which should arrive in France next year, according to the vice-president of the group. Other visible models: the Wuling Bingo launched in March 2023 in China or the T03 from Leapmotor, the partner of Stellantis.
The latter had in fact announced the acquisition of 20% of the Chinese company, declaring that he preferred “ benefit from the Chinese offensive » on electric « rather than being a victim “. It is also this T03 which could arrive on the market the fastest and as early as this year, since Stellantis and Leapmotor should make announcements in the coming weeks on the subject. A small electric city car below 20,000 euros, which would compete with Renault’s Dacia Spring, also made in China and not benefiting from the ecological bonus of 4,000 euros on purchase.
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Models slightly below European manufacturers
Overall, small Chinese cars should be a little below European manufacturers, between 17,000 euros and 20,000 euros.
“Chinese companies do not don’t seem to want destroy their margins. Current prices are slightly below prices from European manufacturers to gain market share and test consumer reaction to Chinese vehicles,” explains Alexandre Marian, associate director at AlixPartners.
Chinese models are thus sold twice as expensive in Europe as on the Chinese market, where competition is too tough to make significant margins. In all, 129 electric vehicle brands exist in China, but only 20 of them have managed to achieve a domestic market share of 1% or more, according to Bloomberg data.
Also, BYD, Leapmotor and others must add transport costs as well as import taxes, an additional cost of around 35%.
After-sales services are key
And this, before the construction of factories in Europe, planned by BYD, MG or, more recently, the manufacturer Chery in Spain. Because the production of vehicles on the Old Continent could further drive costs down.
Electric cars: China cuts prices, European models remain up to five times more
But the attractive price will not be a sufficient advantage. In the latest AlixPartners survey, if the price remains one of the main obstacles to the acquisition of electric vehicles – for a third of respondents – the share of concern about the lack of associated services is increasing.
“ For dealers, the essential margins of a car is done on services and spare parts. The challenge for Chinese manufacturers is also to offer responsive after-sales services », Says Alexandre Marian.
A difficulty that Tesla users are currently complaining about, who regret having their vehicles immobilized for several months when changing parts. Leapmotor with its T03 could thus have a head start on this since it would rely on the Stellantis service network.
Discussions to limit their arrival
The arrival of these small Chinese electric vehicles is one of the biggest concerns for European manufacturers, who are having difficulty lowering the cost of their cars. Several measures are currently being considered on the European side, notably the increase in taxes on imports of Chinese cars, which would go from 10% to 20%.
Moreover, Emmanuel Macron and Olaf Scholz discussed China on Thursday evening, during an informal dinner in Paris, to “ align their positions » before the state visit to France by Chinese President Xi Jinping, the entourage of the French head of state told AFP on Friday. The opportunity to coordinate on strategic decisions for the future of the European automobile industry. Announcements are expected from Monday morning on this subject.
