The record 20 Chinese brands vying for attention at this week’s Paris car show reflect a stark reality: as a slowdown at home pushes China’s overcrowded auto industry to consolidate, success in Europe could help determine which carmakers survive.
With the US market largely closed to Chinese carmakers, Europe is by far the most profitable market still open to them, but also one of the toughest to crack.
Chinese brands including BYD, Chery and SAIC’s MG have already established a foothold in Europe, while newer entrants are racing to build dealer networks, parts operations and brand recognition.
“If they drop exports in Europe, they die,” said François Roudier, secretary general of the International Organization of Motor Vehicle Manufacturers (OICA).
The pressure stems from China itself, where the world’s largest car market has become increasingly crowded.
More than 100 carmakers compete in China, where state support from national, provincial and city governments has helped sustain local champions and delayed long-expected consolidation that could entail significant job losses.
New car sales in China fell 20 per cent in the first half of this year. Omdia analyst Chris Liu said Chinese carmakers, expecting continuing growth, launched an average of three new models a day in 2026.
“This is the worst possible year to launch a new vehicle in China,” Liu said.
Recovery is expected to be slow. Consultancy AlixPartners predicts Chinese new-car sales will not return to 2025 levels until after 2030.
The downturn is increasing pressure on carmakers to find growth abroad, particularly in Europe.
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