Chinese Automakers Deepen Ties with Europe’s Auto Industry

Chinese automakers are accelerating their integration into the European automotive industry, moving beyond simply exporting competitively priced electric vehicles toward embedding themselves in local production, research and distribution, according to the director of the Paris Motor Show. The shift is on full display at the 91st edition of the show, which opened on October 12 and runs through October 18 at Paris Expo Porte de Versailles, where a record number of Chinese brands are competing for European buyers amid an unresolved trade dispute. CGTN reports that 25 Chinese brands, represented by 16 automakers, are taking part — roughly double the number at the 2024 edition.

In an interview with Xinhua carried by the People’s Daily, Serge Gachot, director of the Paris Motor Show, described how the Chinese presence has matured. “They no longer come only with competitively priced electric vehicles, but with broader ranges, mainstream and high-end positioning, and greater attention to design, onboard technologies and the digital experience,” he said.

From exporting to embedding

The most consequential change, Gachot argued, is localization. “By investing in production, research or local supply chains, they become directly involved in this ecosystem,” he said. That localization is already underway: Xpeng has struck a manufacturing partnership with Magna in Austria to build its G9L — its fourth model made in Europe — while Leapmotor is leveraging Stellantis’ European resources, with its B10 already in local production in Spain, according to TMTPost.

BYD is expanding its European manufacturing footprint and studying the possibility of building a factory in France. On October 12, BYD Executive Vice President Li Ke told French media that the company was examining a French plant, a move that would deepen its stake in Europe’s largest vehicle market.

The trend reflects a strategic pivot. In October 2024, the European Union imposed definitive countervailing duties on China-made battery electric vehicles ranging from 7.8% to 35.3% — reaching as high as 45.3% when combined with the existing 10% base tariff. Hybrids were excluded from those measures, and Chinese automakers responded by shifting export volume toward plug-in hybrids and conventional hybrids. EU imports of Chinese hybrids rose from 3,800 units in October 2024 to 50,000 in July 2026, according to a Financial Times report cited by CnEVPost.

That workaround is now itself under pressure. The European Commission has been preparing safeguard measures targeting Chinese hybrids, potentially using tariff-rate quotas to limit imports. On October 8–9, Chinese Commerce Minister Wang Wentao and EU Trade and Economic Security Commissioner Maros Sefcovic held two days of talks in Beijing, reaching what both sides described as an understanding on hybrid vehicle trade. Sefcovic said the arrangement includes halving China’s exports of hybrid and plug-in hybrid vehicles to the bloc, though the specifics of a baseline, timetable and enforcement mechanism remain undisclosed.

A market shifting under their feet

The localization push is unfolding against a rapid electrification of the European market. Fully electric cars accounted for 21.7% of new EU registrations in the first eight months of 2026, up from 15.8% a year earlier, while plug-in hybrids held 10% and hybrids 36.6%, according to the European Automobile Manufacturers’ Association, as reported by European Pulse. The combined share of petrol and diesel fell to 29%, down from 37.5% a year earlier.

That shift has translated into market share for Chinese brands. Data from Schmidt Automotive Research put Chinese brands at 10.7% of the European market in the second quarter of 2026, up from 5.7% a year earlier. In Western Europe’s plug-in hybrid segment, their share exceeded 26%, up from just 2.2% two years prior — a striking jump in a category that sits outside the current EU tariff wall.

The gains are drawing attention from European incumbents. Audi, Citroën, Peugeot, Renault and Volkswagen are presenting new models and electrification technologies at the Paris show, with several reviving retro-inspired designs to appeal to buyers. Yet European carmakers are navigating the transition under difficult conditions: elevated energy prices, weak consumer confidence, looming stricter emissions rules, and a once-lucrative Chinese market that has become far less profitable. “There was a time when the Chinese market was something of a cash cow for European carmakers. That’s no longer the case,” Tim Urquhart, principal automotive analyst at Mobility Global, told European Pulse.

A show built for the shift

The Paris show itself has adapted. For the first time, it has introduced autonomous-driving demonstrations for the public, and it has expanded its test-drive program to around 90 models from 20 brands, with more than 5,000 test drives planned, CGTN reported. Gachot said such hands-on exposure matters. “I genuinely think people need to see the cars, touch them, sit in them, and try them out,” he said.

The Chinese lineup reflects a broadening strategy. TMTPost noted that BYD brought its seven-seat flagship ATTO 8 with a second-generation Blade battery, Xpeng staged the global debut of its G9L flagship SUV, Leapmotor covered both the compact segment with the B03 and the high end with the D19, and Geely appeared for the first time as a group with its Monjaro, Lynk & Co and Zeekr brands. Avatr unveiled the T09 concept, Li Auto showed its Li 6 for Europe, and GAC launched the AION UT Cross.

Cooperation alongside competition

Gachot stressed that integration cuts both ways. “Intelligent driving is a good illustration: it requires combining automotive expertise, software, sensors, data and artificial intelligence. No single player necessarily masters the entire chain alone,” he said. “We are witnessing not only the rapid progress of an industry, but also an evolution in the very conception of the automobile.”

That framing points to a broader reality: as trade barriers rise, local manufacturing becomes both a defensive necessity and a route to legitimacy. Building in Europe reduces exposure to tariffs and shortens delivery times, but it also raises operating costs — European labor, energy and compliance expenses generally exceed those in China. Chinese automakers are responding by partnering with established local players rather than building entirely independent operations, using existing factories, suppliers and sales networks.

What to watch

The coming months will test whether the momentum holds. Both sides plan a China–EU ministerial video conference in January 2027, followed by the third meeting of their trade and investment consultation mechanism in March, leaving room for further negotiation over both hybrids and the original BEV dispute. Analysts caution that booth counts and product lineups are not the same as durable competitiveness. The real measure will be whether Chinese brands can convert show-floor prominence into sustained sales, stable profits and genuine local-scale manufacturing — outcomes that will matter far more than a single week in Paris.