The emblem of German automotive maker Mercedes-Benz is seen as an individual stands in entrance of the firm’s sales space earlier than the opening of the International Motor Show IAA on September 7, 2025, in Munich, southern Germany.
Tobias Schwarz | Afp | Getty Images
Europe’s embattled auto giants are embarking on a product blitz, looking for to counter intensifying competition from Chinese rivals on their house turf.
In the run-up to the IAA Mobility convention, a serious auto present in Munich which kicks off on Tuesday and runs by means of to Sunday, Germany’s Volkswagen and BMW each unveiled new electrical autos.
With a heavy give attention to software program, Volkswagen revealed the small ID.Cross Concept automotive, because it appears to be like to double down on its electromobility dominance in Europe.
BMW, in the meantime, introduced the world premiere of the iX3 sports activities utility automobile, showcasing its so-called “superbrain architecture,” which replaces {hardware} with a centralized laptop system.
France’s Renault, for its half, additionally launched the sixth era of its best-selling Clio mannequin, alongside the Renault 5 Turbo 3E, which it described as the first electrical “mini supercar.”
The product launches exhibit how Europe’s legacy producers are taking the fight to their Chinese rivals, in a bid to each retain market share in the European Union and offset declining gross sales in China, the world’s largest automotive market.
Europe’s auto sector is at the moment grappling with a mess of challenges, from rising production costs to U.S. tariffs, in addition to supply chain disruptions and regulatory pressures.
Rico Luman, senior sector economist for transport and logistics at Dutch financial institution ING, mentioned Volkswagen and BMW’s mannequin launches had been destined for the European house market in the first occasion.
“We know that Chinese players are valued for their digital features among European consumers,” Luman instructed CNBC by e mail.
“It’s clearly a signal that they are ramping up competition with EV-only competitors by introducing a next level technology for their models,” he added.
For Volkswagen, an inexpensive EV is “an important strategic focus point” to strive to unlock and maintain market share, Luman mentioned.
Oliver Blume,CEO of the Volkswagen Group delivers a speech in fron of a Polo I.D. at the International Motor Show IAA on September 8, 2025, in Munich, southern Germany. The IAA Mobility honest runs from September 9 to 14, 2025.
Tobias Schwarz | Afp | Getty Images
Volkswagen CEO Oliver Blume mentioned he does not worry the competitors posed by Chinese gamers.
“Competition, for me, is very positive. It is like in sport: when you have good competitors, you have to be better. That’s what we have been prepared to do in the last years, in terms of improving ourselves,” Blume instructed CNBC’s Annette Weisbach on Monday.
‘Not an both/or competitors’
Chinese automotive producers, resembling BYD and Xpeng, have rapidly made inroads in Europe’s automotive market in latest months, benefitting from a mix of things which suggests they’re in a position to extra cheaply produce EVs than their rivals.
The Asian big’s auto sector development has been attributed to subsidies, tax incentives and, between 2009 and 2023, an estimated $230 billion in EV growth prices. Analysts additionally cited decrease labor prices, the weaker yuan, progressive technological developments and a strong battery provide chain amongst Beijing’s key benefits.
In Munich this week, nonetheless, BMW CEO Oliver Zipse mentioned the IAA Mobility convention would showcase the power of the German and European auto business.
“You will see a lot of competitors showing their best, it is not only BMW,” Zipse instructed CNBC on Friday.
“This is not an either/or competition. This is happening all at the same time. And I think that is the one message in this car show: This industry is connected [worldwide] and that is something to safeguard,” Zipse mentioned.
Elsewhere, Klaus Rosenfeld, CEO of German automotive components maker Schaeffler, instructed CNBC that this week’s IAA convention can be an indication of “self-confidence” and “optimism” for the European auto business.
“It is very encouraging to see that, particularly the German car industry, has done its homework despite all these geopolitical challenges, the competition [and] the things that are happening around us that are unpredictable,” Rosenfeld mentioned.
Schaeffler’s CEO described China as the world’s “most important” automotive market, saying that an organization that may reach China can succeed globally.
“That is, from my point of view, the most important thought that you need to have when you think into the future,” Rosenfeld mentioned.