Chinese car manufacturers eye European market through innovative strategy

In recent months, Chinese manufacturers have markedly stepped up their efforts to penetrate the European market. Cars from China have not only become much more accessible in our region—they're also proving to be increasingly appealing to many consumers.

After an initial surge in interest in Chinese models, the pace of expansion seemed to ease. However, this doesn't necessarily mean European companies can relax about their future and the challenge posed by new competitors. These competitors are still figuring out the best way to officially start their conquest of Europe.

About the strategy that the Chinese intend to use, Pasi Rannus, the CEO of the Finnish company Valmet Automotive, which produces cars for various brands, shared insights with "Automotive News Europe" during an interview. Valmet has partnered with brands like Saab, Porsche, Opel, and Mercedes, the latter since 2013.

Rannus acknowledged that contract manufacturing—the type of car production that Valmet specializes in—could provide a viable route for Chinese manufacturers to effectively break into the European market at a lower cost. Instead of erecting massive, costly factories, they could simply contract a company within Europe to officially produce the cars. This is precisely where the implemented regulations come into play.

Could this strategy be successful? It seems very likely, as demonstrated by Stellantis. It is through the facilities in the historic Mirafiori complex that the Chinese brand Leapmotor could make its entry into the European market.

Here, the situation appears slightly more complex—Stellantis is a major shareholder in this company, which is often referred to as the conglomerate's 15th brand. Nonetheless, the fundamental approach would be the same, namely, contract manufacturing. If this agreement comes to fruition, Leapmotor would certainly set a precedent for other Chinese brands.