With a record 20 brands at the Paris show, China's carmakers push deeper into Europe

Reuters gives two reasons for the turnout. Chinese automakers are largely shut out of the US and face weaker demand at home, and they have increasingly turned to Europe ^[5]. Brad Kunz, a partner at consultancy Grant Thornton Stax, put the weight on the first. "The Chinese are saying 'we've got to try and dominate Europe because we can't do anything in the US'," he said ^[6]. "If the US had allowed Chinese automakers in, Europe ... wouldn't be so much of a battleground." ^[7]

The EU put a tariff on Chinese-made fully electric cars two years ago. Chinese makers responded by moving into the powertrains it did not cover: combustion-engine models and plug-in hybrids ^[10]. Over those two years their share of the Western European plug-in hybrid market has grown about twelvefold ^[24]. Europe's industry now wants tariffs on Chinese plug-in hybrids too ^[12].

I think the defensive framing is right about the market and incomplete about the companies. European makers are selling Chinese rivals capacity at underused factories and drawing on their EV technology, and Stellantis has partnered with China's state-owned Dongfeng ^[14]. "The Europeans are playing a sort of double game," said Pedro Pacheco, vice president of research at Gartner ^[15]. A skeptic would say an industry cannot ask Brussels for protection from a rival while selling that rival factory space. The answer in the record is cost. The pressure from Chinese competition comes on top of weak European demand, US tariffs and the cost of electrification ^[22]. Volkswagen is cutting thousands of jobs and considering factory closures, and BMW is shedding thousands of workers ^[9]. For a plant running below capacity, selling space to a Chinese maker is one alternative to closing it. That choice eases this year's costs and gives a competitor a production base inside Europe for the years after.

On the show floor, Europe is answering with new cars. European carmakers will use Paris to unveil new models and try to reassure investors they can compete ^[3]. "This motor show will probably be the most important one in the region since the pandemic," said automotive analyst Felipe Munoz ^[16]. "This is the platform the Europeans are using to tell the Chinese they're still strong and still ready." ^[17] Stellantis's revived Citroen 2CV will test new rules that let carmakers cut some features to offer cheaper EVs ^[18].

Motor shows have been given new life by the arrival of Chinese brands, after interest from some traditional manufacturers had waned, according to Francois Roudier, secretary-general of the International Organisation of Motor Vehicle Manufacturers ^[23]. "For years people were buying cars, now manufacturers have to sell them," he said ^[20]. He added that manufacturers who did not attend "have made a mistake" ^[21].