The Rise of Asian Car Brands in Europe: Turning a Challenge into an Opportunity

By Khalil Haddad, VP OEM from Nextlane

The vehicle sales and after-sales sector in Europe is undergoing significant transformations. The most notable changes are the agent model—a new direct sales system where vehicles are sold directly to consumers, electrification transition, and simplification of the networks. These shifts, along with the emergence of new competitors like Asian car brands, presents both a challenge and an opportunity for the market.

Growth projections for Asian brands in Europe

Asian car brands are rapidly gaining traction across Europe, driven largely by the continent’s strong push towards electrifying its vehicle fleet. According to Bloomberg, Asian brands made up 11% of the European electric car market in June 2024, achieving a record number of registrations—a trend that is expected to grow in the coming years.

Impact of the European Union measures against Chinese cars

In 2023, the leading countries exporting passenger cars to the European Union were China (521,881 vehicles), Turkey (452,056), the United Kingdom (440,724), South Korea (411,003), and Japan (390,514). However, these numbers could shift dramatically as the European Union’s new tariffs on vehicles manufactured in China take effect. As of July 5, 2024, electric vehicles made in China are subject to additional tariffs of up to 37.6%, intended to counter what the European Commission describes as “unfair advantages” enjoyed by Chinese manufacturers.

It’s important to note that the growth of Asian brands in Europe isn’t limited to China alone. Car manufacturers from India, Japan, and South Korea are also expanding their presence. For the European automotive industry, this diversification represents a valuable opportunity—if they can adapt and seize it.

Several factors contribute to the rising popularity of Asian vehicles in Europe, including competitive pricing, high product quality, and a diverse range of models. As of early 2024, more than 37 models from Asian brands are available in Europe, underscoring a rapidly growing presence that shows no signs of slowing. New brands are launching operations in Europe nearly every few weeks, signaling an ongoing and accelerating expansion.

The commitment to electric vehicles as a competitive advantage and the importance of customer service in sales and after-sales service

One of the most compelling advantages of Asian brands is their broad range of electric vehicles. China, as the world’s largest producer of EVs and batteries, is at the forefront of this industry. As the European Union intensifies its focus on electromobility and sustainable transport, consumer demand for electric vehicles is surging, positioning Asian brands as a highly attractive choice. Chinese manufacturers aren’t just exporting electric cars to Europe—they are also capitalizing on their expertise in ICE (internal combustion engine) and PHEV (plug-in hybrid electric) models. This enables them to gain market share across all segments during this transitional period, the length of which remains uncertain and a topic of debate within the EU.

A Competitive Edge in the European Market

To capitalize on this influx of new players in such a competitive market, European automotive dealers and service workshops must prioritize customer service. Excellent customer service can turn a single sale into a series of recommendations, helping to build trust and credibility for the brands they represent. For Asian brands, ensuring that customers feel supported both during the purchase and throughout the after-sales process is crucial.

Technological advancements are critical to driving this transformation. By leveraging tools such as CRM systems, data analytics, and digital communication platforms, brands and dealerships can significantly enhance the customer experience—offering greater transparency, real-time communication, and personalized interactions. Proactively embracing these innovations allows dealerships to boost customer satisfaction, foster loyalty, and gain a competitive edge. These solutions empower brands to efficiently manage every phase of the sales cycle, providing visibility and control, while delivering a seamless experience for end customers in dealerships.

We’re seeing an increasing number of brands seeking deeper insights into their target market, customers, competitors, and dealers. Asian brands are leading the charge by rapidly launching models and accelerating feedback loops, shortening development cycles, and delivering value across the entire automotive value chain.

Technology as a key loyalty tool

What can European incumbents learn? Asian brands are rewriting the rules of the game by rethinking every aspect of manufacturing, sales, and customer experience. European automakers must capitalize on the EV transition as a pivotal moment to innovate and stay competitive. This requires a customer-first mindset, focusing on future consumer needs rather than merely pushing products. A shift in sales models can empower brands to design more engaging offerings. This might include launching new digital services, reimagining after-sales support, or introducing innovative ownership models like subscriptions. At the core of this transformation, software plays a vital role in driving innovation and enabling these transitions.

If you want to know how digital tools can help you increase customer satisfaction and loyalty, contact us today.