The Paris Motor Show is not just a giant showroom for established European and American brands: it’s also an unrivalled launch pad for up-and-coming brands and those seeking visibility, such as China’s Hongqi and Aito. Brussels decided to impose additional customs duties on these models on October 29.
The Mondial de l’Auto 2024 surprised visitors with a host of new products, and the increased presence of nine Chinese brands is designed to “highlight their technological advances and determination to develop”, as Xinhua, the official press agency of the People’s Republic of China, puts it.
Alongside BYD, Tesla’s omnipotent electric rival, and Hongqi, the doyenne of Chinese automakers (1958), which has become the benchmark for the regime’s top dignitaries, there were less media-friendly but equally dynamic brands such as Forthing (Dongfeng), Maxus (SAIC), GAC, Skyworth, Xpeng, Leapmotor (incorporated into Stellantis) and Aito.
The latter, launched by cell phone manufacturer Huawei and partner of Seres ( already present in Europe), is preparing its arrival on the Old Continent in 2025. This is subject to acceptance of its numerous technological options, some of which have not yet been approved by European authorities.
This Chinese stranglehold is all the stronger given that the Japanese brands Toyota, Nissan and Suzuki, Korea’s Hyundai and a number of European brands (including Volvo, Mercedes-Benz and DS) are missing from the Salon line-up.
To counter what appears to be unfair competition, the EU has decided to carry out its threat to surcharge Chinese imports of electric vehicles.
From Thursday October 31, Chinese battery-powered vehicles will be subject to a surcharge of up to +35%, in addition to the 10% customs duty.
New automotive primer
Its gigantic, full-length stand featured an XXL screen, whose speakers played a single, particularly catchy electro track. Aito, hitherto an unknown quantity in France and Europe, stood opposite Hongqi, the esteemed state carmaker cherished by Communist Party leaders.
Installed in the America Hall of the Motor Show, Aito is, contrary to its name, not a Japanese manufacturer, but a Chinese one. Its acronym carries the promise of artificial intelligence – “Adding Intelligence To Automobile”. And it’s about to arrive in Europe. The result of a partnership between Huawei and the Chinese manufacturer Seres (already established on European soil), Aito was founded in 2021. Since then, between February 2022 and July 2024, it has delivered 400,000 vehicles to its local market. This brand seems destined to eclipse Seres.
At the Mondial, Aito presented the M5, marketed in 2022 and a close relative of the Seres SF5, as well as the M7 and M9 which were launched in 2022 and 2023 respectively. These models were presented under the names Aito 5, Aito 7 and Aito 9 at the Show.
For its part, Hongqi, literally “Red Flag” in Mandarin, well known in the Middle Kingdom and now in India, presented an ultra-luxury vision of the Made in China automobile. The manufacturer, whose designer once worked for Rolls Royce, presented the Guoya. An opulent executive sedan, similar to a limousine, judging by its 5-meter wingspan.
The brand chose the Paris Motor Show to announce its pan-Asian debut with its EH7 and EHS7 models. These vehicles offer a combo of maneuverability, extended range and superior stability that is exceptional in the sector in light of its price. Both cars feature an electric propulsion system with 455 Kw and 756 Nm of torque, capable of reaching 22,500 rpm. And while the top speed – 200 km/h – is impressive, it’s the range – 655 km and 600 km respectively – that really sets the EH7 and EHS7 apart. And what can we say about the 800-volt fast-charging system, which takes the battery from 10% to 80% in the space of 20 minutes!
All these manufacturers have succeeded in offering vehicles with cutting-edge technology at lower cost, to the point of offering equivalent or even superior performance for a much lower price. At BYD, several components are replaced by a single part, while certain elements are standardized across several models.
As explained by Japanese media outlet Nikkei, these manufacturing secrets were revealed by a Japanese parts company. The company literally took apart a dozen Chinese car models in an attempt to unravel the mystery of their rock-bottom prices.
Among the models analyzed was the BYD Atto 3 (marketed in China in 2022 for 140,000 yuan or 18,000 euros).
Rivaling Tesla’s leadership, BYD is currently without doubt the most powerful Chinese brand on the electric vehicle market, and even more so in Europe. One of the world’s Top 10 automakers, the Shenzhen-based company is planning to builda plant in Hungary for its European market, with a target output of 150,000 cars.
At the Paris Motor Show, BYD took the opportunity to highlight its premium YangWang brand and its spectacular U8 SUV. BYD’s competitive positioning is largely due to its vertical integration strategy – including the manufacture of its own Blade batteries.
While the brand is accelerating its deployment in Europe, backed by the support of the Chinese government, it still has to convince European consumers of its quality and develop its local distribution network.
European manufacturers struggle
For their part, European automakers are experiencing major difficulties in China, the world’s largest market. Stellantis and Renault have thrown in the towel, and Volkswagen, Europe’s leading manufacturer, has seen its market share melt away.
At Mercedes-Benz, the 13% drop in sales in the Middle Kingdom took its toll on profits, down 64% in the third quarter. Mini and BMW saw their sales fall by 30%, the biggest drop in four years. Meanwhile, Porsche, majority-owned by Volkswagen, has decided to reduce its dealer network in China. According to its CFO, Lutz Meschke, the aim is to cut costs by several billion euros by 2030, following a 41% reduction in operating profit in the third quarter. The automaker has already planned to cut production from 300,000 vehicles to 250,000.
And if the export situation is problematic, the clouds are also thickening at home. Sales volumes in Europe, for example, have fallen by 20%. The rising cost of living and inflation have dampened the desire to renew vehicles. Not to mention the regulatory uncertainties surrounding motorization , which have led consumers to adopt a wait-and-see attitude.
Add to this the fact that electric vehicles are 30% more expensive than internal combustion vehicles, and you have a sluggish market, to the point that Volkswagen is preparing to close three of its factories in Germany: a first in the company’s history.
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Featured Photo: © Hongqi
