the CEO of the Volkswagen group has sounded the alarm he says the window is closing literally a direct quote the window is closing we have only 2 years to stop them Chinese Avia manufacturers are wanting to beat Tesla not just Tesla but also Legacy auto in Europe and apparently they have a plan for how they're going to do this Reuters are saying this is the main gist of their plan I'm going to tell you guys what I've really think about this Ro as report as well at the end hello my friends welcome to the channel
I'm Sam Evans you're watching the electric Viking great to see you stellantis they've purchased a percentage of a Chinese automaker called leap motor they plan on selling leap Motor Vehicles in Europe that's one way that leap motor will become a an official brand I'm likely santis will simply Rebrand these cars as something like Fiat or one of their many other brands so you'll think you're buying a Fiat or some of the car kind of like mg right S Motors the is massive conglomerate they sell mg vehicles in Europe and everyone thinks they're buying an mg
a British vehicle it's not British at all of course it's Chinese but that's one thing that's happening already however there's a lot more to the story on how Chinese automakers plan on basically unloading the tens of thousands of EVS that are sitting in European ports right now have been sitting there many of them for many months because autom well basically because customers haven't yet purchased them because of a various range of issues but Chinese automakers they plan on dominating Europe because they can't dominate the US they can't I mean 12.5% tariffs on Chinese vehicles sold
in America that basically eliminates them from America so therefore what do they do you go for the lowest hanging fruit you go for Europe starting in the 1980s European automakers steadily conquered China racking up millions in sales with little competition and in the process they made billions and billions of dollars not just over all but every single year now they'll have to defend their home turf in Europe from an onslaught of formidable Chinese electric vehicles which many experts say are better than the than the EVS that they're making and well that's probably true Chinese EV
Titans by Cherry zika Great War Motors Volvo they are preparing a Fus alad of product launchers about 20 over the next 5 years years and spending heavily on sales and marketing in their most important export Market according to reuter's interviews with 18 Chinese Auto Executives consultants and Industry experts familiar with the Chinese automakers European strategy now this is very much a strategy here guys remember the Chinese government will pay these automakers cash directly into their bank accounts for every single car that they sell in Europe they're being incentivized to do this it's also in their
own interest their own best interest in terms of their market share because they can sell these cars at a higher price in Europe versus what they can sell them for in China after years of swiping market share from foreign rivals in China the world's largest China's increasingly potent EB industry is ready to take the fight to Europe and to be fair guys if you compare to say the technology and new zika electric car versus uh anything really from Legacy auto in Europe well the technology is significantly better especially for the price Chinese electric vehicle manufacturers
have Chinese electric vehicle manufacturers they are putting themselves in the position to succeed by studying European car buyers for years hiring industry V veterans I mean look at some of the best designers from from um basically that come from Europe I mean the designer of Audi he's gone to by this is happening across numerous Chinese car brands they're offering these designers and these and these engineers in Europe huge sums of money to come to China and to show them how to take over in Europe now adding to that they're hiring industry veterans and selecting Distributors
with extensive local knowledge as they lay the groundwork to take on Tesla and Legacy automakers sources have said B and Cherry have or announc plans to manufacture cars in Europe as well Chinese car makers are now deploying a range of tactics to break into the market ranging from sponsoring high-profile sporting events which they're also doing in Australia to raising awareness of their brands through numerous different Pathways to building out dealership networks ensuring up service and repair operations to protect resale values that's a key requirement of Fleet buyers who make up a large share of the
European market in fact some estimates say around 40% of all cars sold in Europe are actually Fleet Sales so if you can get these Fleet managers to start buying your cars well you could take potentially 40% of the market just by doing that Chinese automakers European sales have remained small though well outside of mg because their brands are little known to Consumers however though deliveries are growing rapid ly and could surge with the release of additional models across a broad range of price segments industry experts are warning Europeans they're warning Legacy auto they're saying guys
wake up you don't have time bued saw its Europe sales triple to 15,000 vehicles in 2023 that's not much but if it tripled again and it tripled again only a few times over a few years you're looking at domination potentially keep in mind B want to replace Toyota they want to be the biggest car company in the world that's important to them that Prestige is important to them and they're basically willing to sell their cars at a loss to make that happen for as long as they need it to happen for Buy has launched six
electric vehicle models in Europe and a spokesman said the company is rolling them out across 20 countries it launched its first three models in the United Kingdom last year and plans two more this year meaning it would then have five different models for sale in the UK Great Wall plans to launch a model every single year in Europe for the next 5 years two Distributors told Reuters Cherry will launch a total of eight SUV models under two Brands omoto and jaku over the next two years said Cherry's Automotive European managing director now keep in mind
though guys there is not three brands there is like 20 different car brands Chinese car brands who are already selling EBS in in Europe and plan on basically a huge extension to the models that they offer and offering those at lower prices than their European competitors by comparison Tesla has just two volume selling cars the model 3 and the model y both well actually the model Y is due for redesign with declining sales in Europe this year Executives from by greatwall Motors and Cherry told Reuters they are looking to plant deep roots in Europe they'll
be building car factories there building battery factories there cherry tutong said the company is focusing on all facets of the European Automotive ecosystem from branding to financing to repairs and resale values for both private and corporate customers as well we've been doing our homework he said shakes mg well they didn't respond to this because they don't want they don't want you to perceive mg as being um Chinese so mg I mean s and mg they keep very quiet when it comes to these kinds of stories which is I think a wise decision Christine bu of
the Norwegian EV Association said she has met with many Chinese automakers and noted some have spent years planning their European strategy Norway is a global leader in EV adoption so they've gone for Norway First Chinese Brands she said have so far adapted China's EV models for export but they've already working on models designed from scratch to Target European buyers they also don't face the same pressure as Western Rivals to turn a profit quickly because they're heavily backed by the Chinese government she claims some of these players have spent a lot of money on targeting Europe
despite not having sold many cars here yet so there are some cost advantages China's automotive industry is said to be able to make EVS at a price that is approximately 40% lower than European automakers and considering China's automotive industry is a mix of government-owned and private firms it has huge cost advantages over foreign competitors in part because of government subsidies and the country's dominance in terms of batteries and well the entire the entire EV ecosystem in China the explosion of EV brands has ignited a price War many are calling this a bloodbath with automakers LED
by B selling a huge number of EVS priced between $10,000 and $30,000 and the performance range of those products in that price range is improving every single year or maybe even every single month those those rock bottom prices have alarmed automakers outside of China and their political allies in the United States and Europe in May US President Joe Biden quadrupled tariffs on Chinese V to 10.5% the European Union is currently investigating putting subsidies on Chinese vehicles it may soon raise tariffs on its cars but China has warned Europe it said do this and you will
pay we will punish you because remember these European automakers are making more profit selling their vehicles in China than they are selling them in Europe so China can they can retaliate to anything Europe does European executive said at reuter's Event in May that higher tariffs will do little to protect them from Chinese EVS unless Europe's industry acts quickly to match their price and value something that I believe is actually impossible the window is closing said Volkswagen board member Thomas SCH we have two or three years only so far China automakers are not deeply undercutting foreign
Rivals instead they're maximizing profits on exports by charging double and some sometimes triple what they charge in China the Europe prices are just slightly below comparable models from Western automakers for example X Punk sells the G6 for the exact same price to the dollar of the Tesla Model Y in around seven different countries in Europe but the Chinese vehicles are often included with standard equipment that other cars don't get such as heated and cooled seats 360° cameras digital dashboards and better software that often cost extra in competitors Vehicles Japanese automakers used similar tactics when they
expanded globally into Western markets in the 1970s and 1980s as they expand exports Chinese automakers are implementing complex strategies to increase their appeal to Europeans for one have a look at a motor show a motor show in Europe it's dominated by Chinese vehicles they have improved their safety ratings as well they've strengthened repair and service operations and distribution bolstering resale values which are very very important to people who lease these cars if if you're someone who hasn't owned a Chinese vehicle before Chinese EV before or if you're someone who hasn't owned an EV before basically
these Chinese manufacturers are trying to make it as simple for you as possible leasing companies charge lower monthly payments for cars with high resale value because they're worth more at the end of the lease term When Buyers can choose to buy them or return them to the leasing firm CH evv makers attention to detail reflects what they've learned about European consumers said Bo greater China country manager for jto Dynamics a uk-based automotive industry research firm in China the purchase price is important she said but for European consumers it's not just price but total cost of
ownership including maintenance service and residual values Ben Townsen head of Automotive at insurance industry funded safety group thatchum research has been working for the past year with Chinese automakers beyond the obvious like complying with safety regulations and winning High safety ratings which they have been doing Townsen said the China's exporters are delving into more complex questions of how to structure warranties and price repairs in Europe which has higher service labor costs than China there are hard rules on issues like safety that are clear and then there are soft rules that aren't written down Townsen said
the Chinese are very eager to learn the soft rules to figure them out and to outdo their European Rivals when it comes to these these little details the Chinese players are taking a comprehensive look at what constitutes longterm success in Europe said Toby Marshall managing director dor at vehicle distributor IM group who manages great will Motors Aura brand in the UK Aura is their EV only brand IM group has previously launched a slew of new brands in Britain including South Korea's Hyundai and Japan's Subaru so this isn't a very experienced company selling the car is
just the tip of the iceberg she said throughout its entire lifetime ensuring ready access to Affordable spare parts is extremely important Marshall said great W Motors UK AA distributor can provide most Parts within 24 hours and SES mg has said it will open a second European part Center this summer to support growing sales of the mg brand another critical effort is courting Fleet consumers which control a huge share of the European automotive industry for instance avens Europe's largest Leasing Company already has Partnerships with b and Jil to purchase tens of thousands of EVS unlike Tesla
which has undercut its resale values by repeatedly reducing retail prices China's automakers are working with companies like autov Vista which conducts extensive carto Market studies to sell to set optimal residual values for leasing customers Chinese automaker's main challenge though in Europe is reaching the majority of European consumers who don't know they exist I've never heard of these Brands before and once someone tells them about this brand they're a bit hesitant to purchase something they don't know that gives Legacy car makers more time to Stave off the threat of China's exports um says the managing director
at strategy consultancy stacks and he's right but the Chinese are fast Learners he said it won't take them much longer to boost their brand presence China's automakers are turning to social media high-profile sporting events sponsorships and Partnerships with established dealer networks kind of think of like what things that like what red Red Bull do for example to get publicity one of B Distributors in Italy is grouo orino with 70 retail locations in 24 different places our Network allows them to reach CL clients quickly said chairman Pineo Vini this was key for BD greywall Motors and
Cherry are partner partnering with existing dealerships that also sell other EST Lish Brands Cherry's European managing director Joe Ken tuting said the automaker for its Motor Vehicles chose such shared location so people say while I'm here I'll just take a look at these other cars and they obviously see them the prices are lower and then they end up buying one bu because of its scale as China's biggest EV brand and now well obviously the biggest brand in the world is launching mostly now Standalone dealerships and rolling them out fast in the in the past BD
guys had been selling their vehicles through through Distributors local Distributors and this was a problem it's changed now it's building its own Distributors now its own brand factories its own brand retail locations where customers will come and they'll buy it'll be an only BD store just like what Tesla does in other words B is going you know what we're going to do what Tesla's done that has worked we can do that as well Mark Blondell B's UK man marketing manager says the automaker will have 60 UK dealerships by the summer rising to 100 next summer
100 dealerships in a place as small as the UK that's a lot with within 18 months they plan enough location so most British people can reach one within 14 minutes that's their plan has to be it has to be a b dealership less than 14 minutes away from everyone in the UK awareness of Chinese cars is increasing in the UK some of that's thanks to YouTube as well according to research in March from online car Marketplace Carwell 50% of respondents in Germany said that they would consider a Chinese made car up from early 27% in
October so within 6 months the number of people in Germany who would consider a Chinese made EV has doubled 6 months to boost its brand very well funded Bo is spending huge on sponsorships of the Euro 2024 Soccer Championship a spot previous prly occupied by Volkswagen B will showcase its EVS at match venues and get its branding on live broadcast each match Drew more than 100 million views during Euro 2020 according to the union of European football associations basically B is willing to spend whatever it takes in order to get a big foothold in Europe
that will be great for familiarity because people will see b b b we will be everywhere all through the tournament said Blondell the UK's Marketing Manager for B but we're very humble about it even this time next year there will people be some people will be saying by who who's byd but we will educate everyone in Europe that's by's plan now clearly automakers um so far their sales in Europe have been disappointing underwhelming outside of mg that is true but over the next few years Chinese automakers plan on a European Onslaught and these are the
strategies they will use including cutting the price of their cars slowly bit by bit it's sort of like a frog being put in warm water or cold water even and then slowly warming it up until all of a sudden little you didn't know little do you know Legacy auto bunch of frogs sitting in a pot all boiling and cooking thanks for watching
