German CX diary V.: the changing car landscape of German streets

When I walk on the streets of Frankfurt, I often see a combination of Mazda and Mitsubishi cars.

I′d never seen this design, so it raised my attention. I looked once at the badge, which said - MG. Legendary British brand reincarnated into modern cars under the Chinese SAIC group.

They have cleverly partnered with the Mercedes-Benz car dealership network, knowing that Mercedes will discontinue a small range (series A and B with no successor), and want to be able to sell affordable cars.

And MG is about to start its operations in Central Europe soon too.

So I further looked at the data, and I′ve found an ongoing change in the car market:

But do not think of Chinese as only budget cars. In Frankfurt, the NIO electric cars priced 50 000 plus Euro are about to launch their showroom after they have launched in Berlin and Oslo.

So I looked up more related market facts:

> In Internal Combustion Engine (ICE) models, the Chinese brands′ market share in the European market is 1.6%.

> But on Battery Electric Vehicles (BEV) models, the Chinese brands′ market share in the European market is 5.2% and rapidly growing.

> On the contrary - Volkswagen lost 20% market share in China, and Mercedes and BMW lost more than 30%.

What does it mean from CX's perspective?

That external change - such as a push to change to an environmentally more accepted type of powertrain - may change traditional customer decision algorithms. If customers have to buy something different, they are willing to look broader and give a chance to challengers. That is why Tesla was the most sold car on the German market in September, and its year-over-year growth is enormous, from 40 000 last year to 80 000, maybe even close to 100 000 this year.

And German brands nowadays de-invest their ICE cars to focus on high-end Electric Vehicles. Still, they rarely allow the latest 800V charging technology to be built into their cars, equipping with it only Porsche and Audi top models. The (not only) Chinese challengers are gaining market share in most segments: low-cost ICE, affordable electric, but also high-end electric.

Also, they are testing new approaches in presales such as building prospect channels by hiring community managers from companies such as Airbnb or in sales by using direct-to-customer sales (D2C) models.??

Bottom line?

For Europe, it would be good the European brands to be able to keep up and compete.

However, one thing is irreversible: the Chinese offensive has started and is gaining strength because of execution or change management mistakes by others and also environmental change. And I bet the streets of Central European cities will look different soon too.?