Chinese Autos Steal Munich Spotlight, But BMW, Mercedes Fight Back

Chinese vehicles dominated the Munich Auto Show, but the locals could take some comfort and pride from the debuts of local manufactuer BMW’s next-generation Neue Klasse technology, and a new Mercedes.

The first iteration of the new technology is the all-electric BMW iX3, said to deliver about 30% more range and 30% faster charging. This technology and design will be used for over 40 new or updated models across EV and ICE models. Professor Ferdinand Dudenhoeffer’s Center for Automotive Research says this and the new Mercedes engineering are crucial to winning sales in China and against the Chinese in Europe.

The proper name for the show is IAA Mobility 2025, short for Internationale Automobil-Ausstellung. French auto consultants Inovev lists the participants in its report saying of the 29 carmakers present, 10 are European and 14 Chinese.

Along with the BMW iX3, Mercedes also makes a big splash with the next-generation GLC midsize SUV EV which will have an 800-volt electric charging system and range of about 435 miles. Volkswagen introduced the new T-Roc small SUV and the near-production version of the little EV, the ID.2, which will be known as the ID.Polo.

Leading Chinese contenders were BYD, the world’s biggest maker of EVs, Stellantis affiliate Leapmotor, and Xpeng. The European Union last year imposed big tariffs on Chinese EVs, but given their alleged 30% efficiency advantage, sales are still likely to accelerate. BYD is introducing its Seal 06 DMI station wagon and Seal U SUV. Leapmotor is showing the BO5, an EV hatchback said to compete with the VW ID.3. Xpeng has the new electric P7 sedan.

Meaningless names

Many of the 14 Chinese names will mean nothing to Europeans. Chery launched its Omoda and Jaecoo brands in Germany at the show. Guangzhou Automobile Group unveiled its Aion V compact SUV and Aion UT compact hatchback.

The Chinese are also concentrating on plug-in hybrids, which don’t carry the same penal tariffs as pure EVs, and which may have a long-term future if the EU decides to dilute its carbon dioxide emissions regime. The rules currently demand new cars from 2035 must emit zero CO2.

If these Chinese carmakers are to become household names in Europe there will have to be massive and expensive advertising campaigns, not to mention even more pricey investments in dealer networks.

Michael Dunne of the Dunne Insights newsletter points out that Chinese carmakers hold nearly 6% of the total European market, and 10% of EV sales.

Laughable knockoffs

The Chinese first started trying to sell cars in Europe in the early 2000s, but the quality was poor and the designs often laughable European knockoffs.

Dunne says all that has changed, except the competitive prices.

“Even with European tariffs in place, Chinese models often remain cheaper while offering longer range, faster charging, and sophisticated software. Meanwhile, Chinese brands are opening R&D centers in Munich, building stores across Europe and partnering with local players to look and feel European,” Dunne said.

BMW expects its Neue Klasse engineering to fight off the challenge from China both there and in Europe, according to the Center for Automotive Research’s Dudenhoeffer.

“The New Class isn’t just a vehicle, but a completely new vehicle architecture for future BMW electric models. The four central computer chips – called Domain Controllers by engineers – that control the vehicle are interesting. BMW somewhat heroically calls these “super brains.”

“The acid test for vehicles based on the New Class architecture will be China. China is by far the largest car market in the world and the home of the electric car. If BMW can reverse the trend there, it will be a huge leap,” he said.

Boosting electric cars in Europe

Dudenhoeffer said the new Mercedes GLC is very significant too, for similar reasons.

“This step fits in with what Mercedes is showing in Munich with the new GLC, featuring an 800-volt battery system and a 700-kilometer (435 miles) range. The GLC is the best-selling Mercedes, so it will be exciting to see how the Chinese version is received. And of course, VW too, with the ID.Polo, which will give electric cars a new boost in Europe. So the Germans have something to show in Munich, and we can be proud of that,” Dudenhoeffer said.

The show closes September 14.