For years, Europe’s luxury carmakers could comfort themselves in the face of China’s rapid ascent in the field of affordable electric cars. After all, who could expect to compete with Porsche, Mercedes-Benz, BMW, Audi and the rest? Those trims seemed protected by history, engineering prestige and decades of badge power.
Things are changing.
As the Beijing Auto Show opens this week, Chinese automakers are not merely showing up with cheaper alternatives. Companies such as Geely and Nio are now rolling out premium models packed with advanced technology and high-end features and pricing them well below their German rivals. It’s a fight over value, desirability and status itself.
That is what makes this moment more than another auto-show eye candy. For the past several years, China’s car market has been abuzz with rapid electrification, subsidy-fueled growth – but now painful overcapacity. The domestic market is now crowded, sales have weakened, and automakers need new ways to stand out. One answer is to go upscale.
Reuters describes a flood of large, premium “9-series” SUVs arriving at the show, a sign that Chinese brands no longer want to own only the bargain end of the future. They want the profitable end, too.
The most vivid example may be Geely’s premium Zeekr brand. Its new 8X, a full-size long-range plug-in hybrid SUV, comes loaded with the kind of theatrical technology that stands out in showrooms and on social media.
What new features does it offer? It can raise itself before a side collision to better protect passengers. In tight parking spaces, the driver can wave at it and the vehicle will pull itself out so people can get in more easily. The starting price, under $53,000, makes the comparison even sharper when set against premium German models that can cost more than twice or even several times as much.
And if you don’t think that can happen, consider the way Genesis has edged its way into the American luxury market, or Kia, Infiniti and even Lexus. Luxury has always depended on sizzle, glamour, and storytelling. For decades, German brands sold heritage, precision and the promise that buying one of their vehicles meant buying into a lineage.
But heritage has less force when buyers are more interested in software, screen quality, driver-assistance systems, charging convenience and interior “wow” factor.
Analysts quoted by Reuters say Chinese consumers, especially younger ones, are increasingly drawn to the future-facing technology of domestic EV makers and care less about the legacy that once gave German marques their top position in the pecking order.
The numbers already bear this out. Automakers’ cumulative sales in China have fallen nearly 25 percent since 2019, and Mercedes-Benz, BMW, Porsche and Audi all posted first-quarter declines there. Meanwhile, Chinese automakers are increasingly looking abroad, and even with European tariffs on Chinese-made EVs, they have still managed to keep prices below comparable European rivals.
That means this is not simply a China story. In the ultra-cutthroat auto business landscape, it’s a warning shot for Europe and, eventually, for Detroit. The old luxury hierarchy is being challenged by companies that have learned how to combine speed, technology and aggressive pricing in a way that would have seemed unthinkable five years ago.
This article was originally published on forbes.com and all figures are in USD.
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