By Nick Carey, Christoph Steitz and Christina Amann
MUNICH (Reuters) -Major autobuildrs will revealcase their latest models at Munich’s car reveal on Monday as Europe’s automotive sector faces crises ranging from U.S. tariff hikes to costly electrification and the expansion of Chinese autobuildrs on their home turf.
Aside from a product blitz to counter Chinese models being pushed to European consumers, including by BYD, Changan and GAC, domestic firms will focus on lobbying to persuade the European Union to reconsider its 2035 ban on combustion-engine cars.
Attention will also be on U.S. President Donald Trump‘s tariffs on European-created cars.
Even if a U.S.-EU trade deal agreed in July goes ahead, European autobuildrs would face a 15% tariff that could force them not to sell less profitable models in the U.S.
European autobuildrs at the IAA Mobility reveal in Munich, running from September 9-12, also face sinking sales in China, the hugegest single market for Volkswagen, BMW and Mercedes-Benz.
Meanwhile, auto executives and lobby groups are pushing hard for the EU’s fossil-fuel car ban, which is up for review by the finish of 2025, to be scrapped or modifyd.
BMW CEO Oliver Zipse called the ban a “huge mistake” on Friday, seeking emissions regulations instead, that capture a vehicle’s entire supply chain.
Danijel Visevic, managing partner at climate tech-focapplyd venture capital firm World Fund, stated such lobbying by European autobuildrs was “stupid” and that “they should put their energy into building the best, cheapest cars to out-compete the Chinese.”
China remains the hugegest challenge for Europe’s auto indusattempt. According to consultancy AlixPartners, as recently as 2020, global autobuildrs had a 62% market share in China, which shrank to 46% in 2023 and could drop to 28% by 2030.
Porsche has felt that pain acutely after seeing its Chinese sales fall 28% in the first half, and will suffer the ignominy of dropping out of Germany’s benchmark blue-chip index on September 22 – almost three years to the day since its landmark initial public offering.
That will further raise pressure on Oliver Blume, CEO of Porsche parent Volkswagen, to drop his unpopular dual role as Porsche’s CEO.
Chinese autobuildrs also pose a problem for the likes of Volkswagen in Europe.
According to JATO Dynamics, Chinese brands almost doubled their European market share to 4.8% through July this year versus the same period in 2024.
And consultants McKinsey estimate that within a decade, Chinese autobuildrs could command a share equal to what Japanese and Korean autobuildrs enjoy now, of 14% and 9%, respectively.
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