Chinese Brands Seize 7.4% of European Auto Market as Legacy Manufacturers Struggle With Overcapacity

Chinese automotive brands captured 7.4 per cent of European car sales in October, more than doubling their market share year-on-year as traditional manufacturers confront accelerating competitive pressure amid factory overcapacity running at crisis levels.

MG maintained dominance amongst Chinese marques with 33,536 October sales, followed by BYD at 24,336 units and Chery's combined brands at 18,454. Together, the three account for 83 per cent of Chinese sales in Europe. Year-to-date through October, Chinese brands have surged 83 per cent to 522,587 units, lifting market share to 5.3 per cent from 2.9 per cent in 2024.

The expansion comes as European factories operate at merely 55 per cent capacity utilisation, gradually ceding ground to Chinese rivals, according to AlixPartners consultancy. Chinese brands are projected to command 10 per cent of the European market by 2030, equivalent to two million vehicles annually.

Responding to EU tariffs on Chinese-built electric vehicles, manufacturers shifted strategy dramatically. Plug-in hybrids climbed to 29 per cent of Chinese brands' October European sales from just 3 per cent a year earlier, whilst battery-electric vehicles fell to 32 per cent from 48 per cent. BYD's Seal U plug-in hybrid led this pivot, becoming Europe's bestselling PHEV after nine months.

MG rose to 15th place in European brand rankings, overtaking Volvo, Nissan and Citroën. BYD secured 20th position whilst Chery's Jaecoo and Omoda entered the top 30.

The surge intensifies pressure on European manufacturers already implementing painful restructuring. Volkswagen announced closure of three German plants alongside 10 per cent workforce pay cuts, whilst Stellantis CEO Carlos Tavares resigned unexpectedly in early December following declining sales both in Europe and North America.

AlixPartners estimates overcapacity equivalent to eight automotive plants across Europe, though analysts clarified this represents potential closures rather than confirmed shutdowns. The transformation could determine whether European manufacturers maintain competitiveness or permanently lose ground to Chinese technological advancement and supply chain dominance.