Europe
Chinese carmakers expand European share as Stellantis loses ground
Chinese brands are rapidly gaining market share in Europe. Exclusive data reveals which manufacturers are suffering the most from this new competition.
According to research by Handelsblatt, Chinese brands accounted for 8.7% of new vehicle registrations from January to July, compared with only 0.6% in 2021.
Based on an analysis of figures from the data service Dataforce, this share has nearly tripled compared with 2024 alone.
Concerns are growing in industry circles that this offensive by Chinese manufacturers will continue to accelerate and that price competition in Europe will intensify.
In the first seven months, approximately 780,000 new cars belonging to Chinese brands hit European roads, a figure almost equal to sales for the whole of 2025.
According to Handelsblatt’s analysis, the manufacturers initially expanded their presence in Southern and Eastern Europe, as well as in the United Kingdom.
Equipped with the experience gained there, they are now targeting the largest, but also the most challenging, passenger car market: Germany.
With sales of nearly three million new cars a year, the German market remains in the hands of German manufacturers.
In addition, Stellantis, the multi-brand group that includes Opel and Peugeot, alongside Toyota and Korean manufacturers Hyundai and Kia, hold significant market shares. These shares are now at risk.
Albert Waas, a partner at the consultancy firm BCG, says: “As a first step, Chinese carmakers are targeting the core business of high-volume manufacturers.”
In this segment, it is easier to increase visibility on the roads more quickly. Far Eastern brands are offering affordable compact and family cars, as well as an increasing number of SUV models.
Chinese manufacturers are benefiting from the growing electric vehicle segment in Europe, but they are also taking advantage of declining customer loyalty to established brands.
Opel parent company hit hardest
The biggest loser is Stellantis. The group’s market share in Europe currently stands at 15.5%. In 2021, this rate was still close to 21%. This represents a drop of just under 155,000 units.
According to the major bank UBS, the reason for this is that Stellantis experiences “significant overlap in terms of countries and segments” with Chinese brands. “Company-specific problems” also played a role in this situation.
Stellantis’s ambitious electric vehicle plans did not yield the expected results, and numerous product recalls were carried out due to quality defects stemming from cost-cutting measures.
Ford is also struggling with new competitors, and its market share fell from 4.6% to 3%. Among German manufacturers, the core Volkswagen brand was particularly affected. Its market share has fallen from 10.7% to 9.9% since 2021.
To a lesser extent, Japanese carmakers such as Nissan and Mazda, as well as Korean manufacturers such as Hyundai and Kia, also lost market share to Chinese brands.
On the other hand, Renault’s market share remained stable at around 6%. UBS attributes this to a “strong product cycle”. The French carmaker is launching numerous new electric models, such as the Renault 5 compact car, and these models are being well received.
Because Chinese cars are cheaper and in some cases technically superior, Europeans are becoming increasingly willing to purchase car brands from the Far East.
At the same time, Chinese manufacturers are being forced to expand more aggressively abroad. In the domestic market, a destructive price war continues among more than 100 competitors, in which almost no manufacturer can make a profit.
In addition, the automotive industry has lost its importance in China’s five-year plan.
Because the US is effectively closing its doors to Chinese manufacturers, these producers are focusing primarily on Europe.
According to experts, they can charge twice as much for their vehicles in this market as they do in China.
This explains why passenger car exports from the People’s Republic of China rose by 78% in August compared with the same month last year, reaching 894,000 vehicles.
In contrast, domestic sales contracted for the eleventh consecutive month, falling by almost a quarter to 1.55 million.
A few Chinese brands dominate the market
Even when Toyota entered the European market in the 1970s and Hyundai in the 1990s, there were warnings that established manufacturers could lose market share to Asian rivals.
What is new now is that Chinese manufacturers are making progress in the electric vehicle segment and in software, areas where they are considered leaders.
They are benefiting from the rapid surge in demand for electric cars in Europe, driven by government subsidies and high fuel prices caused by the war in Iran.
According to the analysis, China’s market share in electric cars in Europe has already reached 12.6%. In 2021, this rate was only 2.1%.
Volkswagen is feeling the impact of this situation: in 2021, the Wolfsburg-based company held an approximately 14% share in the electric vehicle segment, which was significantly smaller at the time. That figure is now below 8%.
Stellantis’s market share in electric cars, meanwhile, fell from over 14% to around 10%.
Dataforce counts 19 Chinese manufacturers in Europe. However, five brands account for 83% of sales.
BYD, the world’s largest electric car manufacturer, also leads in Europe. As of the end of July, the brand’s new registrations reached 217,000, and its market share stood at 2.4%.
BYD has thus already surpassed brands such as Volvo (202,000 units), Nissan (183,000), and Tesla (178,000).
New registration figures for the Fiat (262,000), Ford (272,000), and Opel (284,000) brands are also within BYD’s reach.
MG ranks just behind BYD with 211,000 registered vehicles. Formerly British, this brand is part of the Chinese holding company SAIC.
The manufacturer Chery holds a 1.7% market share in Europe through its Jaecoo and Omoda brands.
Leapmotor is experiencing particularly strong growth. The 65,000 registrations recorded by the end of July by Stellantis’s joint venture partner represent more than double the total figure for the whole of 2025.
The reason for this is a one-off factor: nearly 40% of Leapmotor’s registrations this year came from Italy.
There, the retail price of the T03 microcar dropped from its regular price of 18,900 euros to below 5,000 euros, thanks to a manufacturer discount and a government electric vehicle incentive.
Regional differences exist across Europe
Significant regional differences exist: in Spain, Portugal, Italy, and Greece, Chinese carmakers account for 11.4% of sales.
BCG expert Waas says: “In Southern Europe, people traditionally buy more small cars, and this is a segment where Chinese manufacturers are strong.”
In the south, Stellantis suffered particularly severe losses. In 2021, this multi-brand group accounted for almost a third of new registrations in the region; that figure is now only 22.3%.
Ford fell from 4.8% to 2.7%. Other high-volume brands such as Volkswagen and Renault, as well as Japanese and Korean manufacturers, are also experiencing slight declines.
In Eastern and Northern Europe, the situation among the losers is similar. However, the extent of the Chinese manufacturers’ presence varies between these regions: while their market share in Eastern Europe is 9.5%, it stands at 7.3% in Denmark, Sweden, Norway, and Finland.
In Central Europe, the share of Chinese manufacturers is 5.1%, a figure similar to that in France, an important automotive market. In Germany, this share is currently only 4.1%.
However, compared with the 2.3% rate recorded in 2025, this represents a dynamic increase.
This situation is also likely linked to the German government’s new electric vehicle support programme, from which Chinese brands have particularly benefited.
Matthias Schmidt of his eponymous consultancy says: “Loyalty to domestic brands in Germany and France remains a structural obstacle for Chinese carmakers.”
In Germany, the market shares of domestic brands have barely changed. In France, too, buyers continue to feel a strong attachment to Renault, Peugeot, and Citroen.
Chinese manufacturers have a particularly strong presence in the United Kingdom. A quarter of all vehicle registrations by Chinese brands in Europe took place in the United Kingdom. Their market share in this country hovers just below 16%.
Chinese manufacturers are increasingly shipping their electric vehicles to the United Kingdom because, unlike the European Union, no special tariffs are applied there.
In addition, their task is easier in the United Kingdom due to the absence of large-scale domestic manufacturers.
Premium segment remains largely unaffected
In the premium segment, however, attempts by Chinese manufacturers to gain a foothold in Europe have so far ended in failure.
The European market shares of Audi, BMW, and Mercedes-Benz have remained largely stable for years.
The carmaker Nio, which has a unique selling point with its battery-swapping technology, sold fewer than 500 vehicles in Europe this year.
Although Xpeng reached more than 24,000 units thanks to a significant increase, its market share remains below 0.3%. Zeekr, meanwhile, did not exceed 0.08%.
The reason is that Chinese brands appeal to a different customer base. Car dealer Burkhard Weller says: “Anyone who buys a Chinese car brand is a bargain hunter.”
In contrast, buyers of premium brands in Europe usually “are still investing in a certain image.”
Yet concern is also growing among premium manufacturers. As CEO Ola Kallenius has frequently emphasised, although Mercedes has not yet lost European market share to new rivals, he stated in a letter sent to employees this summer that Chinese competitors with “very lean cost structures and high innovation speed” are entering the European market.
Experts believe Xiaomi in particular has a strong future. The manufacturer plans to begin its international expansion in 2027.
Xiaomi founder Lei Jun said: “The first market will be Germany, the most difficult market in the world.” BYD also plans to expand the reach of its premium brand Denza in Germany.
Chinese automotive companies expected to grow further
UBS analysts forecast that Chinese manufacturers will increase their European market share to 20% by the end of the decade.
However, industry expert Schmidt estimates that their share of the all-electric vehicle market will not exceed 15%.
Schmidt argues that new Chinese manufacturers will compete with established rivals for the same customer base and will eventually begin to cannibalise each other’s market share.
Moreover, “established manufacturers are stepping up their efforts to protect their market share.”
Consequently, European brands are introducing more affordable electric cars to the market.
At Renault, the electric Twingo is already on sale for less than 20,000 euros.
Volkswagen plans to launch the ID.1 microcar at this price point in 2027.
Regulation is also affecting future developments. Since the EU began applying tariffs to electric cars in the autumn of 2024, Chinese carmakers have rapidly expanded their hybrid vehicle offerings.
Hybrid cars currently account for 53% of Chinese-origin vehicle registrations in Europe, compared with only 15% in 2021.
As a result, calls are growing among German politicians to impose tariffs on hybrid vehicles of Chinese origin.
This year, BYD overtook Volkswagen in plug-in hybrid vehicle registrations. For this reason, industry sources state: “If the German government cannot convince Europe that tariffs should be imposed on hybrid vehicles, then we have a problem.”
Europe
Fico accuses Merz of blackmail over threat to veto EU budget
Slovak Prime Minister Robert Fico has hit back after German Chancellor Friedrich Merz threatened to veto the EU budget unless funding for Ukraine is secured.
Merz said he would block the EU’s seven-year budget if no agreement is reached on financial assistance for Ukraine.
The chancellor’s intervention has angered Central European leaders who are net beneficiaries of EU funds but do not want to take part in the next round of funding to support Ukraine’s war effort.
“What the chancellor is doing is typical blackmail, and I will not bow to it,” Fico told reporters in Bratislava.
Fico spoke alongside his Czech counterpart, Andrej Babiš, whose government has refused to participate in a future loan to Ukraine.
“I do not know why he said this,” Babiš said, referring to Merz’s stance.
Merz wants EU leaders to discuss Ukraine’s financing needs at a summit in Dublin on Friday.
In a letter to European Council President António Costa, who will chair the meeting, obtained by The Guardian, Merz wrote:
“We must maintain our support for Ukraine in its struggle to defend itself. This is our shared vital interest. Yet bilateral aid provided to Ukraine is distributed unevenly, with the burden shouldered mostly by only a few member states.”
The EU agreed last year to provide a €90 billion loan to Ukraine, intended to cover two-thirds of its military and civilian spending for 2026 and 2027.
Since then, however, Russia’s relentless bombardment has placed a heavier financial burden on Kyiv, prompting President Volodymyr Zelenskyy to ask for €70 billion to plug the budget deficit.
The EU has endorsed Zelenskyy’s figures and pledged to find €45 billion. Ukraine’s other allies, such as Britain and Canada, are expected to cover the rest.
Last year, Merz launched an initiative to tap €210 billion in frozen Russian state assets held in the EU, but the plan fell through due to opposition led by Belgium, which holds most of the funds in Brussels.
The €90 billion loan was the backup plan. Having opted out of that loan, Hungary, Slovakia, and Czechia indicated that they would not take part in the next round either.
Bulgaria joined these three member states following the election of Prime Minister Rumen Radev last April.
The question of funding for Ukraine is now spilling over into the fraught negotiations on the 2028-34 EU budget.
Germany, the largest net contributor, wants substantial cuts to the proposed budget and opposes the EU providing generous funding to member states that refuse to contribute to Ukraine’s financial needs.
Merz states in his letter that a “collective commitment without exceptions” is a “fundamental prerequisite” for closing Ukraine’s financing gap and for “discussing other matters, particularly those with financial implications.”
He also notes that, in the context of the EU’s next seven-year budget, known as the Multiannual Financial Framework, all member states must contribute to a “robust” financial perspective for Ukraine from 2028 onwards.
A German government official said:
“For the Multiannual Financial Framework (MFF) to be successfully concluded, it is vital that all EU member states provide financial support to Ukraine.”
Berlin is also aiming to shift decision-making on funding for Ukraine from unanimity to qualified majority voting, in an effort to prevent a single government from blocking EU decisions.
The letter reflects mounting frustration among the EU’s northern member states, Ukraine’s most generous backers, over lower contributions from other EU countries in Central and Southern Europe.
The task of brokering an agreement on the budget falls to Costa, the former Portuguese prime minister.
Costa wants a deal by the end of the year, ahead of elections in France, Poland, and Italy in 2027 that could complicate the process.
A spokesperson for Costa confirmed receipt of the letter without elaborating on details. “President Costa will dedicate time to the Ukraine issue at the informal European Council meeting in Dublin this week,” the spokesperson said, adding that funding for Ukraine would be addressed at a dedicated summit on the EU budget scheduled for 26-27 November.
Europe
EU expects next Israeli government to adopt less aggressive posture
The EU expects the next Israeli government to mend its “difficult relationship” with Brussels and adopt a more constructive approach toward Gaza and illegal settlements.
Israeli President Isaac Herzog tasked Gadi Eisenkot, the leader of the anti-Netanyahu bloc, on Sunday with forming a government.
Eisenkot stated that the country faces a “catastrophic diplomatic crisis” as traditional allies begin to reassess their relations with Israel.
Speaking to Rapporteur, several European diplomats stationed in Tel Aviv said they expect ties to get back on track.
“Whatever government comes in, we can try to revitalize relations because Israel is clearly a very important partner,” one European diplomat said, adding that Brussels expects the next administration to be “less aggressive”.
The diplomat noted that relations with Europe are currently “not very good”.
Israel cut off communication with Kaja Kallas, the EU high representative for foreign affairs and security policy, after Rapporteur revealed in June that she had compared Israel to apartheid-era South Africa during a visit to Mexico.
The diplomat stated that this decision, taken ahead of elections, was political in nature. A second European diplomat based in Brussels explained that the announcement came only a few days before an official visit by Dubravka Šuica, the European commissioner for the Mediterranean.
“This could have been interpreted as a tactic to divide Europe, but Israel had asked Kallas to deny the report; she did not do so,” the second diplomat said.
Brussels has repeatedly voiced its frustration with Israel over the humanitarian crisis in Gaza and the expansion of West Bank settlements.
However, EU governments blocked almost all sanctions proposed by the European Commission.
A third diplomat said opposition parties would “almost certainly take the issue more seriously” when it comes to tackling violence by West Bank settlers:
“We see Palestinians being expelled from their homes and new illegal settlements being built in the West Bank. There is a reluctance on the part of the current government to address this issue, which causes problems in our relations.”
The new government is expected to ease pressure on Palestinians and halt construction of the E1 settlement project, a controversial plan to build settler housing in the West Bank east of Jerusalem.
“They will probably try to deal with the problem of extremist settlers in the West Bank,” the diplomat added.
On Gaza, the diplomat described the situation as “a complete nightmare”, with two million Palestinians crowded into an area that accounts for roughly 35% of the territory.
“There are not enough tents for the winter, and not enough vaccines are reaching the area despite an increase in diseases,” the diplomat said.
The European official argued that Donald Trump’s peace plan met all the conditions for Europe. Although the EU had much to offer, neither the US nor Israel appeared interested in EU involvement in the process.
“We are currently training Palestinian police in the West Bank, and if permitted, we could do the same in Gaza,” the diplomat said.
The diplomat disclosed that Israel had agreed with Šuica that Europe would finance two projects aimed at improving sewage and water infrastructure in Gaza, continuing:
“However, none of these projects has started yet because there is a serious problem with dual-use goods. Getting materials into Gaza is very difficult because the Israelis say they could be misused if they fall into the wrong hands of Hamas.”
Israel insists that Hamas must be disarmed before subsequent phases of Trump’s plan can proceed.
With disarmament unlikely to happen in the near term, the EU argues that certain measures can be carried out in parallel.
“We can begin rebuilding sanitation systems in Gaza. We can start building desalination plants. We can begin providing energy and water to Gaza,” one diplomat said.
While Brussels hopes for progress on Gaza and the West Bank, it maintains that expectations regarding the establishment of a Palestinian state need to be “managed”.
The EU continues to advocate a two-state solution, yet most leading Jewish parties oppose the creation of a Palestinian state.
The diplomat noted that the next Israeli government will likely have “a very slim majority and not much room for manoeuvre”.
There is also a “major misunderstanding” between the EU and Israel that must be addressed. According to the diplomat, Europeans fail to recognize the “psychological impact” of 7 October on Israelis.
“This event changed the country and made the two-state solution even more distant than before,” the diplomat said.
In return, some Israeli politicians believe Europe has betrayed Israel despite what they view as a fight against “Islamist terrorism”.
“Their argument is that European politicians are somewhat afraid of the Muslim population in Europe,” the European diplomat said.
Europe strongly opposes Iran and the possibility of Tehran acquiring nuclear weapons, imposing sanctions in response.
However, the diplomat argued that the EU would not participate in a war because it lacks a common army:
“We are a diplomatic and economic power, which is why we resort to sanctions and diplomacy. The expectation that we would take part in a military operation is unrealistic.”
Europe
Germany threatens EU budget veto over long-term Ukraine aid
Germany has threatened to veto the European Union’s joint budget for the 2028-2034 period, which is currently under negotiation, unless every member state commits to providing financial support to Ukraine in 2027 and subsequent years, German Chancellor Friedrich Merz warned.
According to a report by the Financial Times (FT), Chancellor Merz set out Berlin’s condition for the budget talks in a letter addressed to European Council President António Costa.
In his letter, Merz wrote: “A collective commitment that every single one of us, without exception, will make a fair contribution to closing Ukraine’s budget deficit is an indispensable prerequisite for resolving this budget issue and, in particular, for addressing subsequent matters that carry financial implications.”
The German Chancellor stressed that a formula backed by all member states must be established to provide Ukraine with a reliable, multi-year financial perspective starting from 2028.
Merz also insisted that any agreed solution must cover the interest payments on debts incurred to finance the assistance provided to Kyiv.
Conversely, several countries within the bloc have cut financial aid to Ukraine, and the number of capitals adopting this stance is projected to rise next year.
In December 2025, Hungary, Slovakia, and the Czech Republic approved the EU’s 90 billion euro loan package for Kyiv only on the condition that they would not contribute to its costs themselves.
Alongside these three countries, Bulgaria has also stated that it does not plan to participate in subsequent financial assistance packages for Ukraine.
In France, far-right leader Marine Le Pen, who could potentially win the presidential election scheduled for spring 2027, recently told the FT that Paris has run out of funds.
Le Pen assessed: “The honest approach is to tell Mr Zelensky clearly, and even warn him: ‘Look, we cannot do more. We have already allocated the 90 billion euro EU loan, in which France’s share amounts to 18 billion euros. 18 billion euros is genuinely a huge amount of money.'”
The EU’s 90 billion euro loan, covering the 2026-2027 period, aims to meet two-thirds of Ukraine’s financing requirements.
Brussels expects the remaining 45 billion euros to be covered by other partners, including Canada, the UK, Norway, Japan, South Korea, and Australia.
Germany remains the largest net contributor to the EU budget.
In contrast, the four Eastern European countries seeking to avoid financing Ukraine rank among the largest net beneficiaries of the bloc’s budget.
Leveraging this balance, Chancellor Merz aims to use his influence in the EU budget negotiations to secure uninterrupted support for Kyiv in 2027 and the years beyond.
According to the FT, Berlin is also demanding that future aid packages be decided by qualified majority voting rather than unanimity, which is required under the current system.
A German government spokesperson told the newspaper:
“The issue of Ukraine’s financial needs must be resolved within the framework of the next EU budget. Financial support for Ukraine from all EU members is decisive for the successful conclusion of the budget talks.”
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