The IAA of the Chinese

In the run-up to this year's IAA Mobility, automotive industry expert Ferdinand Dudenhöffer had already considered Chinese car manufacturers to be so strong that they could dominate the industry trade fair. That's exactly how it happened. Dudenhöffer therefore called it “the IAA of the Chinese”. The Association of the Automotive Industry (VDA) also points to increased interest from abroad. The proportion of foreign exhibitors has increased by 17 percentage points to 50 percent, said association president Hildegard Müller.

This year's IAA was heavily influenced by Chinese suppliers. This also had to do with the fact that numerous traditional brands stayed away from the trade fair. Among those absent were the likes of Peugeot, Citroën, Fiat, Hyundai, Kia, Toyota, Ferrari, Jaguar and Volvo. The strong presence of suppliers, mobility service providers and IT companies was also noticeable at the trade fair.

Although the market share of all Chinese manufacturers in Europe is currently relatively low at just under 2.5 percent, it has already doubled compared to the previous year. Of this year's IAA exhibitors, a remarkable 41 percent were based in China, which not only threatens the dominant position of European manufacturers in the field of cars with combustion engines and electric engines, but also in the strategically important Chinese market. Eric Kirstetter, senior partner at the consulting firm Roland Berger: "All forecasts assume that the international corporations on the Chinese market will lose market share to the local brands and Tesla."

The appearance of the Chinese manufacturer BYD at the IAA Mobility was particularly impressive. The company, which is now considered the world's largest manufacturer of electric cars, emphasized that the Chinese are now doing more than decently in terms of product quality. At the trade fair they presented their electric mid-range models Seal and Seal U. Leapmotor, Nio, Great Wall, SAIC and other Chinese manufacturers also presented their electric models.

Software Defined Cars

At the IAA, however, electric vehicles only represented one topic in a changing automotive world. Software-defined cars are an equally important topic. User-oriented software is becoming an increasingly important element for modern customers. According to many experts, this is one reason why Chinese manufacturers have a decisive advantage in the field of electric cars compared to their Western competitors.

Volkswagen is looking for support in this area from the Chinese start-up Xpeng, which wants to launch in Germany in 2024. Germany manager Markus Schrick announced that he would work with established retailers, while many other newcomers primarily rely on online sales. So far, Xpeng is active in Northern European countries, but there are also plans for France and Great Britain in the pipeline for next year.

Turning the price screw

If BYD and other Chinese manufacturers are able to further reduce prices in Europe, this would cause problems for the traditional brands. Tesla is also turning down the price screw by relying on a limited number of model variants, while German manufacturers are still heavily involved in the technical variety of models. And the Chinese car manufacturer Nio, whose vehicles are already available in Germany, is planning another innovation. The company wants to draw attention to itself with a unique offer: Instead of charging the battery, Nio drivers can have it replaced automatically within a few minutes at a changing station.

The IAA Mobility 2023 was remarkable in several respects, as it made it clear that the global automotive industry is undergoing a rapid transformation process that can no longer be stopped. Those of the car manufacturers who are now able to act both innovatively and price-consciously have a good chance of winning the battle for the customers of the future.