Destined for the U.S. market, eventually?

Launches include the XPeng GX, NIO’s ES9, and Zeekr’s 9x. These vehicles are so huge and technology-laden they seem designed for the U.S. market, although its 100% tariff makes that unlikely at the moment. These upmarket behemoths might make Bentley, Aston Martin, Mercedes’ Maybach, Range Rover and Lamborghini a little nervous.

And it’s not just exports that will hit Europe. In a recent report, strategy consultants AlixPartners said Chinese automakers will nearly triple overseas production to 3.4 million vehicles by 2030, with Europe and Latin America as primary targets.

Accenture Automotive & Mobility’s Juergen Reers said Chinese manufacturers have now moved on to high-tech driver assistance.

“What I see at this year’s China Auto Show is how much the focus has shifted. Previously, the emphasis was on technical metrics such as battery capacity, charging, and drivetrain performance. Now, the intelligent vehicle is the central theme,” Reers said in an email exchange.

"One of the biggest shifts this year is the democratization of features: what used to define premium vehicles, advanced features, intelligent systems, autonomous driving and high-end capabilities, is now rapidly moving into mass-market and smaller cars.”

“Product differentiation today is no longer about access to technology, but about how well you execute and integrate it, while long-term profitability (manufacturers) increasingly defined by the full ownership experience, including software, digital services, updates and upgrades,” he said.

Too big for Europe?

Steve Young , managing director of British-based automotive retailing consultancy ICDP, was last at a Chinese auto show 10 years ago where he said the quality was laughable. Not now. Every car felt solid. The cars and SUVs were now much bigger.

“Without smaller products, more suited to European road conditions, the advance of the Chinese will be constrained by product relevance,” Young said in a report.

“Styling is an area where we could perhaps also hope to see some more innovation. Most brands had models that looked like a Range Rover, a Defender and a Porsche Taycan. Will we get to a point where a Chinese brand comes up with a distinctive look that the other brands choose to take an inspiration for their next model? That would be a landmark moment without doubt,” Young said.

Investment researcher Jefferies said because of weak demand now on the Chinese market, the show reflected the need for exports, the development of premium brands, and driver assistance systems becoming ubiquitous in cheaper models.

The wave of “9-series” flagships represented a decisive push by Chinese brands into the premium segment, Jefferies said in a report from the show – “Bigger Stage, Tougher Battles”.

“Competition is shifting from brand-led to tech-led luxury, with LIDAR (for autonomous driving), air suspension, high-voltage platforms, and advanced chassis systems increasingly standard,” the report said.

“As Chinese (manufacturers) shift toward an overseas profit‑led phase by 2026, global strategy is evolving from vehicle exports to integrated operations, with leaders such as BYD, Geely, and Chery showcasing full ecosystems spanning brand portfolios, electric powertrain systems, charging and energy solutions,” according to the report.

Role reversal

Accenture’s Reers said the role of foreign manufacturers in China was changing as they lost market share to locals. Where once they were the teachers, the roles had now reversed.

“Looking at multinational companies, I see a strong push toward localization in China. They are investing heavily in innovation, design and engineering capabilities to better understand local customer preferences and to become more integrated into the Chinese market. At the same time, they are learning from “China speed” in development processes, and they are applying these learnings globally. China is not only a key market but also an important innovation hub and export base,” Reers said.

This is a big problem for the German industry in particular. Professor Ferdinand Dudenhoeffer, director of Germany’s Center for Automotive Research, said in a recent report German automakers’ sales in China had slipped from 4.8 million to 3.9 million in three years.

“The existing business model – developing cars in Germany and then building them in China with a slightly longer wheelbase - is increasingly problematic - too slow, too expensive, and not innovative enough. VW has taken a major step forward towards a new business model with its “In China for China” strategy. The year 2026 will be a kind of litmus test for the strategy.” Dudenhoeffer said.

“Mercedes is relocating larger portions of its value creation to China. A kind of small “In China for China movement. BMW, for now, is sticking to the traditional approach with its new EVs,” Dudenhoeffer said.