BYD, Xpeng, Great Wall partner with dealer groups in Europe

MG, the legacy British brand owned by China’s SAIC Motor since 2009, sold more than 100,000 vehicles in Europe last year and says it currently has more than 800 distribution points at local car dealers across Europe and the U.K.

Europe has seen its fair share of new entrants trying to win over buyers. The successful ones, like Toyota and Hyundai, only slowly crept higher in the ranks and never posed a real threat to Volkswagen’s dominance.

Tesla’s success

Now, the industry’s paradigm shift to EVs is creating unprecedented opportunity for newcomers. Tesla’s success has shown that consumers are open to outsiders, though it’s unclear whether Chinese brands will be able to match the marketing draw of Elon Musk. But with its unmatched control of the battery supply chain, China is well positioned to expand its share.

Part of the Chinese newcomers’ strategy is to entice buyers with a range of commitment-light ownership options, starting with Lynk & CO’s monthly subscriptions. Dealers, though, remain central.

Because of consolidation in the industry and smaller shops going out of business, the number of car dealers in Germany has fallen to 6,800 in 2020 from nearly three times that in 2000, according to the IfA institute, which monitors auto-industry trends. The number is expected to almost halve by 2030, as automakers move increasingly toward online sales.

While new potential partners from China could be a boon to struggling dealerships, there are also risks. With so many new EV entrants flooding the market, some are bound to fail, which could leave dealers sitting on unsellable inventory.  

Where Chinese upstarts will land in a few years will depend on how things go during the next 24 months, according to Bernstein analyst Daniel Roeska.

Market share could be between 5 percent to 20 percent by the end of the decade, and it’s unclear whether they will be able to follow Tesla’s path.

“Recreating Tesla’s success will be a challenge,” Roeska said. “But it’s not impossible.” BYD, Xpeng, Great Wall partner with dealer groups in Europe

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