How did this shift from European luxury to Chinese luxury happen in just a few short years
In the past 5 years, we have seen the momentum of luxury vehicles coming from Chinese auto manufacturers rising steeply. Yes, it has been a fast and very progressive rise and most of the European legacy auto manufacturers were slow to notice or they decided to ignore the Chinese luxury revolution in their vehicles.
Today, well established German auto manufacturers are looking at how once ‘backyard’ Chinese auto brands have overtaken them in cabin fit, finish, material quality and even design.
Even more alarming, the European designers, engineers and product planners (see image above) resigned from the legacy brands and are now working for Chinese auto manufacturers in China and every year at the Beijing or Shanghai auto shows (past 4 years) you see these senior caucasian executives sitting alongside their new bosses in China.
Luxury car production is rapidly shifting, with China emerging as a dominant force in high-end electric vehicles (EVs) and also plug-in hybrids that challenge traditional European prestige brands.
Chinese manufacturers like Chery, BYD and Geely are capturing market share with tech-heavy, premium models that is priced almost half and offer better safety and cabin touch points with materials very very very similar to what legacy brands are also using.
The examples include the following brands
Lotus Eletre: An all-electric Hyper-SUV produced in China.
Volvo EX30: A compact luxury SUV produced in China and also available in European markets.
Smart #5: A premium electric SUV developed by Mercedes-Benz and Geely, built in China.
Citroën C5 X: A flagship model produced in China for global markets.
So, we know that Chinese automakers are targeting premium European rivals with superior, high-tech features at lower selling prices and longer factory warranties and also in some countries, after sales programs that stretch 7 to even 10 years.
Then we have Chinese auto companies that are pioneering in intelligent electrification (900v and flash charging), focusing on advanced battery range and AI integration which legacy brands are falling behind.
Finally, even foreign brands like Tesla produce their European-destined Model 3 in Shanghai and the all new MINI electric from BMW has all its electric versions being produced completely in China in partnership with Great Wall Motor (Zhangjiagang, Jiangsu province). Then, there is the BMW iX3 Crossover which is built in Shenyang (Brilliance Automotive).
While European brands still hold heritage, Chinese brands are aggressively targeting the premium segment, forcing established manufacturers to adapt
So, this is a “Nokia Moment” for Europe!
If a Chinese auto brand can offer an electric or even PHEV car with better driving range, faster software, and a more premium interior for RM100,000 less than a German equivalent, “brand heritage”eventually hits a breaking point.
Once car buyers realise the quality is equal or ‘surprise surprise’ …… superior, the old prestige advantage disappears.
If China successfully smart selling price leadership with brand prestige, they won’t just be participants in the global market, instead they will set the standard.
Do you think the current European tariffs will actually slow this Chinese vehicle brand-building, or will they just force Chinese vehicle manufacturers to build even more “premium” factories inside Europe?
