7 surprising takeaways from the Beijing auto show

The China Auto 2024 trade fair in Beijing is already a highlight of the automotive year. I'm taking these points home with me.

The Chinese will no longer give up their own market to foreign manufacturers. In 2023, they had a 56 percent market share (14.6 million vehicles). They know what their customers want — a lot of the latest technology and fewer and fewer combustion engines. When a model is unveiled at the Xiaomi stand, cheering fans resemble those at Apple events. At the same time, Chinese automakers offer their cars at incredibly low prices. No one can keep up.

German manufacturers are the second strongest nation in the Chinese market, with 4.6 million vehicles sold. Their premium-luxury models are a status symbol for young, successful Chinese, even as more and more domestic car manufacturers are establishing luxury subbrands.

And the Volkswagen brand? It wants to reinvent itself once again to fulfill the special customer wishes of the Chinese, with a new design language and more tech — what VW brand boss Thomas Schäfer calls a "unique China VW DNA."
He said the concept car ID Code is "athletic and styly" on the outside, has driver-assist technology able to operate at Level 4, and features interactive lighting systems that provide information and communicate intelligently with their surroundings. Also included: An AI-supported avatar.

VW will not surrender without a fight in the market that the Wolfsburg company has dominated like no other for so long before BYD last year conquered the No. 1 position. Having entered China in 1982 and with almost 40 VW Group factories in the country today, the Chinese see Volkswagen itself as a bit Chinese.

Vehicles are getting bigger and bigger in China. Huge SUVs and limousines are on the stands. There is no sign of small cars, which are supposedly what customers want. You have to dig all the way to Wuling to find budget cars. The new models from Geely or BYD are so big that even Americans are amazed. The electric G-Class from Mercedes is midrange at best. The new limousine from Honqi, on the other hand, is reminiscent of the stretch limousines of the 1990s. That mobility should become more climate-friendly while new vehicles resemble clunky tanks is a contradiction that cannot be quickly resolved.

Despite all this, the design of many new Chinese brands is very similar, run-of-the-mill SUVs and sedans. Each model reminds you of another model from a different stand. "Haven't I just seen that one somewhere?" Interchangeability is increasing. This means electric startups, in particular, lack the necessary narrative for a strong marketing story.

But you need a good story to attract Chinese buyers: either as a top player in New Energy Vehicles (BYD, Tesla), as a traditionalist (Geely, SAIC), as a Western premium (BMW, Mercedes, Audi, Porsche) or as a tech company (Xiaomi, Huawei) or simply as the cheapest supplier (Wuling, Leap).

Chinese brands that don't stand out are facing consolidation. Many will disappear in the next two or three years. And once that begins to unfold, consolidation will intensify. Nobody wants to buy a car from a brand that could soon be insolvent and be unable to get spare parts or software updates.

The market for plug-in hybrids is definitely there. It would be interesting to count how many battery-electric vehicles, PHEVs and combustion engines are in the exhibition halls in Beijing. In China, the number of plug-ins almost doubled to 2.8 million vehicles in 2023 over the previous year, including range extenders, for a 12 percent market share. In China, plug-ins are treated the same as battery-electric cars in terms of state subsidies, have the same tax benefits and are not banned from urban areas. This "bridging technology" will be needed longer.

In tourism, there is a new trend of "like a local," meaning to travel to a place and live there. In the auto industry, you're hearing this translated more often. Volkswagen has had the "In China, for China" strategy for some time, but has now expanded it. At BMW, we heard exactly the same thing at the Beijing press conference: "In China, for China." To understand the customer, you have to become Chinese, so to speak. Mini's Aceman and Smart with its new Hashtag model #5 are joint ventures. And at BYD in Shenzhen, we hear about the European strategy: "In Europe, for Europe." China's BEV market leader wants to become "a European company," says BYD's top manager Stella Li, with factories, infrastructure and dealers. So much harmony doesn't sound like a trade war.

Who would have thought the van would become so attractive? The Chinese have now underpinned this trend with several new models featuring lots of space, comfortable seats and large screens. Customers love it. In China, it is a luxury product and not a workman's van. Whoever has something to offer in this segment (Denza, Zeekr) can sell well. This will also be interesting in the long run, when autonomous driving is possible at a higher level. Tesla boss Elon Musk recognized this trend a few years ago and said in an interview with Automobilwoche that a really attractive van was needed in the portfolio because the vans on the market were not sexy. Now they are coming, although not from Tesla.

The car is not dead, and neither are motor shows. With hundreds of influencers and presenters, mostly young people, reporting on the trade fair on the first press day, the discussion about the end of the car seems to be a fairy tale. The appeal of the automobile is even increasing.

With high-tech features and the coming of autonomous driving, the car is perhaps the most desirable gadget of the next decade.

Burkhard Riering is the publisher and editor-in-chief of Automobilwoche, the German-language sibling publication of Automotive News. He traveled to the Beijing auto show in late April to get a sense of the world's largest automotive market.