Chinese carmakers are rapidly gaining ground in Europe, squeezing out Asian rivals such as Japan and South Korea as exports to the region surge past 1 million units for the first time, according to an industry report.

Imports of Chinese-made cars into the European Union in 2025 jumped 30.7 per cent from a year earlier to 1.006 million vehicles, according to the report published by the European Automobile Manufacturers’ Association, known as the ACEA, on April 2.

The value of those imports, however, rose just 4 per cent to €13.7 billion (US$16.1 billion) from a year earlier, suggesting that many of the vehicles sold at relatively low prices.

The report highlights the growing competitiveness of Chinese brands in Europe, particularly in electric and hybrid models. Cars manufactured in China accounted for 7 per cent of EU sales in 2025, up from 5 per cent a year earlier. By comparison, the market shares of Japanese and South Korean vehicles remained unchanged at 4 per cent and 3 per cent, respectively.

BYD, the biggest Chinese carmaker, outsold Tesla in the European market for the second consecutive month in February, with its 17,954 vehicle registrations slightly exceeding Tesla’s 17,664, according to data released by the ACEA in March.

In Europe, the shift towards EVs is accelerating competitive pressures. Battery-electric and hybrid vehicles continued to gain market share in 2025, while demand for traditional petrol and diesel cars declined. Chinese carmakers with a strong line-up of lower-cost electric vehicles are well positioned to capitalise on this transition.

At the same time, European carmakers are struggling to maintain their foothold in China, once a key growth market. EU passenger car exports to China plunged 43 per cent in value last year to €8.3 billion, while shipments fell 42.8 per cent to 159,743 units, the report said.