According to a report by the Hong Kong English media The South China Morning Post on July 6, Chinese car brands are accelerating their expansion into the European market, pushing Japanese automakers' share in Western European markets to its lowest level in forty years. Analysts believe that Chinese automakers are continuously capturing markets through electric and hybrid vehicles. Although trade barriers also bring new uncertainties to future growth, the demand from emerging markets will help mitigate some of the impacts caused by European trade policies.
According to data from the German automotive consulting firm Schmidt Automotive Research, in April this year, the market share of Chinese automakers in 18 Western European countries increased to 10%, doubling compared to 4.9% during the same period last year. Meanwhile, the market share of Japanese brands dropped from 11.4% to 10.3%, which is far below the 14.3% reached by Japanese brands such as Toyota and Nissan in 2007.
Chinese BYD models make their debut at the 2025 Munich International Motor Show, IC Photo.
The agency predicts that as Chinese brands under SAIC Motor, such as MG, launch more hybrid models, the market share of Japanese automakers in Western Europe may quickly fall below 10%, hitting a new low since the early 1980s.
According to Matthias Schmidt, an analyst at Schmitz Carbus Research, the slow transition of Japanese automakers to pure electric vehicles is a major reason for the continuous loss of market share. Due to insufficient demand for local electric vehicles, it is difficult for Japanese companies to achieve sufficient scale effects.
He stated that Japanese car manufacturers need to introduce truly competitive pure electric vehicles. Otherwise, it will become increasingly difficult for European consumers to distinguish between Chinese and Japanese brands.
According to data from the Association of European Car Manufacturers (ACEA), in May this year, Chinese brands accounted for 12% of new car registrations in 32 European countries, including EU member states, as well as the UK, Norway, Switzerland, and other European countries. This represents a significant increase from previous years, when Chinese and Japanese brands accounted for 7.5% and 12.2%, respectively. This growth occurred against the backdrop of the EU imposing additional tariffs of up to 35.3% on Chinese imported electric vehicles.
Meanwhile, Chinese automakers continue to experience strong growth in overseas sales. BYD's global sales in June reached 175,300 units, a nearly 95% increase from the previous year; Geely Automobile's exports increased by 157%, reaching 102,900 units, both setting new record highs.
Several international financial institutions continue to view the development prospects of Chinese cars in Europe positively. JPMorgan and BNP Paribas estimate that Chinese intelligent vehicles are expected to occupy about 20% of the European market share in the next four years.
However, analysts point out that the EU is considering extending tariff measures to plug-in hybrid vehicles produced in China, which could become a new challenge for Chinese automakers. Fitch Ratings believes that higher tariffs and policy uncertainties will slow down the growth of Chinese exports to Europe in the medium term, but emerging market demand will still offset some of these effects.
