Munich Auto Show: The "Red Carpet Moment" for Global Automotive "New Nobility"

Chinese automakers are rapidly increasing their influence in the global market with "Made in China" products.

Not only did China surpass Japan in terms of car exports in the first half of this year, becoming the world's largest car exporter, but the ongoing Munich Motor Show, one of the world's top five auto shows, has also become a stage for showcasing China's automotive prowess.

The Munich Motor Show 2023 (IAA MOBILITY 2023) was held from September 4th to 10th local time. As a grand event in the European automotive industry, this year's show has seen a strong presence of Chinese brands.

Overall, this year's show has the largest number of Chinese automakers ever, with nearly 50 Chinese companies participating, which is twice as many as the previous edition, accounting for about 7.4% of the total exhibitors (675 companies).

Unlike in the past, this year's participants include not only complete vehicle manufacturers but also numerous component companies and intelligent automotive software and hardware suppliers. The participating complete vehicle manufacturers include BYD, Xiaopeng Motors, Leapmotor, SAIC Motor MG, Aiways, and Seres, among others; the participating component companies include CATL, EVE Energy, Xinyuancn, and Enovate in the field of power batteries; and the participating software and hardware suppliers include Horizon Robotics, Yikatong, QZ Intelligent Navigation, and Yuanrong Qixing, among others.

Undoubtedly, the most eye-catching presence is BYD, whose booth is larger than that of Mercedes-Benz, leading some media to jokingly say that this is the "least German" German auto show ever.

At this show, BYD showcased six new models, including the BYD Seal (known as the Dolphin overseas), the Song PLUS EV Champion Edition, the Yuan PLUS (known as ATTO 3 overseas), the Dolphin, the Han, and the Tang D9. The BYD Seal was officially launched in Europe, with two models available at a price range of 44,900 to 50,990 euros (approximately 350,000 to 400,000 RMB); the Song PLUS EV Champion Edition made its debut with European consumers and will be launched in Europe soon.

BYD press conference scene "Crowded"

In addition to showcasing new vehicles, BYD also presented technologies such as the CTB battery pack integration and the iTAC intelligent torque control system at the Munich Motor Show. Wolfgang Egger, BYD's Chief Design Officer, also introduced the "Ocean Aesthetics" design concept.

For a long time, technology and design have been the weak points of Chinese automakers. In the early days, most domestic cars relied on imitating and borrowing from foreign products, leaving behind the label of "shanzhai" and low quality overseas.

Now, with the help of the grand stage of the Munich Motor Show, BYD is facing the media and the public to showcase its technology and design, establishing a new image and brand value for BYD and even the entire Chinese automotive industry.

It is worth mentioning that Wang Chuanfu, Chairman and President of BYD, personally appeared at the Munich Motor Show, demonstrating BYD's attention to the European market and determination to capture this market.

In addition to BYD, Leapmotor also flexed its muscles at this year's Munich Motor Show. It not only released the latest achievement of eight years of independent research and development, the LEAP3.0 technology architecture, but also unveiled its first global mid-to-large-sized SUV C10 based on this architecture, which attracted strong curiosity from Europeans.

Furthermore, Aiways also made the global debut of its second model, the Aiways 12, at this year's Munich Motor Show, demonstrating its attention and expectations for the European market, as well as hoping to further expand its brand influence and market share through this model.

UBS Breaks Down BYD Dolphin, Expects China's Global Market Share to Nearly Double to 33% by 2030

Recently, UBS Investment Bank's research department conducted a detailed analysis of BYD's supply chain, cost structure, and technology by dissecting BYD's latest generation electric vehicle model, the BYD Dolphin.

Lian Peikun, Head of UBS Securities China Research Department, said:

"Since UBS first dissected the Chevrolet Bolt in 2017, we have also dissected the Tesla Model 3 and Volkswagen ID.3 in 2018 and 2021, respectively.

Considering that we believe Chinese electric vehicle manufacturers already occupy two-thirds of the global automotive market, this year UBS dissected BYD's latest generation electric vehicle product, the Dolphin.

We expect that Chinese electric vehicle manufacturers are poised to become global giants, and they will also have a positive impact on the upstream and downstream industries. We estimate that the autonomous driving market will reach $100 billion by 2030."

Gong Min, Head of UBS Investment Bank's China Automotive Industry Research, commented:

"BYD enjoys a cost advantage of about 25% compared to traditional competitors, and this advantage is sustainable, making it possible for BYD to turn the tables on traditional automakers on their home turf.

In our baseline scenario, the global market share of Chinese automakers is projected to increase from 17% to 33% by 2030, with European automakers experiencing the largest market share loss.

From now until 2030, the global market share of traditional automakers may decline from 81% to 58%, with the fuel vehicle segment facing a greater impact from structural contraction."

UBS also stated that the Seal has a 15% price advantage compared to the Tesla Model 3.

In addition, French automotive consulting firm Inovev stated that the price advantage of all BYD models sold in Europe ranges from 10,000 to 15,000 euros (equivalent to $10,700 to $16,000).

Inovev stated in a report:

"In Europe, Volkswagen's current product lineup includes the ATTO 3 (compact SUV), Han sedan (mid-to-high-end), and Tang large SUV (high-end), while the mid-priced Dolphin sedan will soon be launched alongside the Seal."

Investment research firm Evercore ISI also indicated that by 2030, pure electric vehicles from China may account for 15% of the European market, with BYD potentially capturing at least half of that market share.

European Automakers Feel the Crisis

Foreign media have rarely spared praise for Chinese companies participating in this exhibition.

The Wall Street Journal's headline reads: "China's Tesla - BYD is Going Global."

Reuters UK stated that the focus of this year's Munich Motor Show is on Chinese electric vehicles, overshadowing local companies.

Germany's WirtschaftsWoche stated: Starting from 2023, Chinese automakers have surpassed German automakers in the field of innovation for the first time, and the Munich Motor Show will be the "Chinese IAA."

Some American media even bluntly stated: "The Munich Motor Show is no longer Germany's home turf; it has become a 'solo show' for Chinese automakers."

European automakers have also felt the impact of the fierce offensive by Chinese automakers.

In the era of fuel vehicles, Europe was the birthplace of automobiles, with related technologies developing for over a century, creating a strong atmosphere of technological innovation and accumulating a wealth of new technologies. In the traditional automotive industry, Volkswagen, Mercedes-Benz, BMW, and other automakers are from Germany, and Bosch, Continental, ZF, and other leading suppliers are also German companies. Germany is undoubtedly one of the top players in Europe, and the IAA held in Germany is an excellent platform for showcasing new technologies.

Volkswagen's "small-displacement turbocharged engine + dual-clutch transmission" powertrain, pioneered in 2010, has set the technological trend in the global automotive industry for nearly a decade and has been emulated by many automakers such as Ford, General Motors, and BYD. But in the era of intelligent electric vehicles, Germany has lost its role as a technological leader.

On the eve of the Munich Motor Show, BMW unveiled the VISION NEUE KLASSE concept car for the future. This highly anticipated product is set to go into production in 2025 and features technologies such as an 800V electrical architecture and voice assistant. However, the trend in China is already seeing widespread adoption of technologies like 800V and intelligent cabins. This means that by the time the VISION NEUE KLASSE goes into production, the technologies that are currently considered highlights may continue to lag behind Chinese automakers by 2025.

Hildegard Mueller, President of the German Association of the Automotive Industry (VDA), stated that Germany is losing its competitiveness. He added that the Munich Motor Show demonstrates the "high pressure of international competition," which necessitates increased investment in electrification in Germany.