Chinese automakers gain global traction

A KPMG study reveals that Chinese automakers are increasingly challenging the global automotive hierarchy, with nearly half of surveyed executives believing that six of the top ten automakers worldwide will be Chinese by 2035. This shift is attributed to the rise of electric vehicles and progress in battery, software, artificial intelligence, and digital service technologies.

Expansion of Chinese automotive brands

Chinese automakers like BYD, Geely, Chery, and XPeng are no longer limited to low-cost cars. They are developing their own technologies, expanding product ranges, and increasing their commercial presence abroad. In Europe, Chinese brands have doubled their share of new car sales in 2025, reaching approximately 6%.

Challenges for Chinese automakers in Europe

European buyers still prioritize brand reputation, resale value, spare parts availability, and after-sales service, which Chinese automakers are still working to establish. Additionally, European duties on certain electric vehicles made in China complicate their market entry, though Chinese brands are also leveraging hybrid and thermal engines, which are not subject to these duties.

Software and digital technologies as key differentiators

According to the KPMG survey, 51% of executives believe that software and digital technologies will become the primary source of differentiation for automakers by 2035. While traditional aspects like engine performance and chassis design will remain important, they will no longer be enough to set models apart. Manufacturers that can regularly improve their onboard systems can extend consumer interest and create new revenue streams through digital services.

European automakers face internal challenges

European automakers have the necessary engineers and financial resources but struggle with organizing activities, managing complex electronic architectures, and coordinating multiple teams. In contrast, Chinese automakers benefit from an environment where digital services already play a significant role in the automotive experience. While they may not master all technologies better than their competitors, their development speed can provide an edge in certain segments.

Collaboration between European and Chinese automakers

Volkswagen has recognized the growing influence of Chinese automakers and has partnered with XPeng to develop connected vehicles and an electronic architecture tailored to the Chinese market. This collaboration has extended to thermal and plug-in hybrid models produced locally, reflecting a broader trend of cross-border cooperation in the automotive industry.