Chinese automakers make tech-led pitch for Europe's premium car market

Volkswagen AG

16/10/2026 09:44

    * Chinese automakers target Europe's lucrative premium
segment
    * Brands showcase 'intelligent luxury' at Paris car show
    * Carmakers seek higher-margin growth amid slowdown at home

    By Nick Carey and Christina Amann
       PARIS, Oct 16 (Reuters) - China's automakers are betting
European drivers will embrace a new form of premium motoring
centred on technology rather than heritage, with brands such as
Changan's Avatr and BYD's Denza pitching what they call
"intelligent luxury".
    Having rapidly gained share in Europe's mainstream car
market with affordable models and the latest tech, Chinese
carmakers now have their sights on a bigger prize: the
continent's highly lucrative premium segment.
    At this week's Paris car show, Chinese brands showcased
premium vehicles packed with advanced driver-assistance systems,
rapid charging and comfort features, hoping to persuade buyers
to choose unfamiliar Chinese badges over established luxury
names.
    But winning over Europe's premium buyers is likely to take
time.
    "You need to be in this market long enough to build up your
presence and credibility," said Zheng Yeqing, a vice president
at Chinese electric vehicle maker Xpeng  9868.HK , which
launched in Europe in 2020 and saw its sales there more than
double to more than 29,000 cars in the first eight months of
2026. "It takes persistence."
    Europe's premium segment is dominated by Germany's BMW
 BMWG.DE , Mercedes-Benz  MBGn.DE  and Volkswagen's  VOWG_p.DE 
Audi, whose decades of brand heritage carry far more weight with
European buyers than they do in China, where consumers place
greater emphasis on technology features.
    With domestic vehicle sales in China falling 20% in the
first half of 2026 and competition intensifying, Chinese
automakers increasingly need the margins that premium vehicles
can deliver.
    Europe is the obvious battleground. Chinese brands are
effectively shut out of the US, the world's most lucrative car
market, while BMW, Mercedes, Audi and Porsche  P911_p.DE  sold
almost 2 million vehicles in Europe in the first nine months of
this year alone.
    Chinese brands such as Geely's  GEELY.UL  Zeekr have already
gained share from German premium rivals in China with
lower-priced models packed with technology features.
    Avatr  000635.SZ  unveiled an electric premium sedan and SUV
in Paris that will start at around €60,000 ($67,400) and feature
rapid charging and comfort extras including a massager in every
seat.
    Justin Li, who heads the all-electric brand's overseas
expansion, said Avatr estimates that Europe represents 72% of
sales of cars priced above $50,000 outside the US market.
    "If we want to be a premium brand, if we don't enter Europe
... we don't really win," Li said.
    
    REDEFINING LUXURY?
    Typically, a German premium car launch includes images
celebrating a brand's heritage, such as an early 20th-century
craftsman carefully shaping an elegant piece of wood trim.
    The Chinese premium car launches in Paris were different. 
    During Aito's unveiling of four electric SUVs, Seres
 602127.SS  Vice President Clifford Kang, representing the
brand's parent company, highlighted its "intelligent
technology". An accompanying video showed Aito vehicles
automatically swerving to avoid obstacles or carrying a tower of
full champagne glasses on the hood without spilling a drop.
    Aito's philosophy, Kang said, is "intelligence redefining
luxury".
    Brad Kuntz, a partner at consultancy Grant Thornton Stax,
said Chinese automakers are reshaping what luxury means for some
consumers.
    "You've got that old bespoke luxury of European cars of
years ago," he said. "But in the EV world you've got more of the
elegance being built in from a technology standpoint."
    European premium brands are watching the newcomers closely.
    "Audi is confidently embracing growing international
competition, including from China," a spokesperson said. "It is
the task of European policymakers to ensure fair competitive
conditions in Europe."    
    Top-end brands such as Volkswagen's Bentley appear unfazed. 
    During the unveiling of Bentley's first EV last month, CEO
Frank-Steffen Walliser told reporters that real luxury comes
from the "heart of Europe" and is irreplaceable.
    Speaking on condition of anonymity, an executive at a major
Chinese automaker acknowledged the challenge. "Deep down in my
heart, we still have a gap between us and those European luxury
brands," he said.
    But he added that Chinese automakers should be able to catch
up "within a decade or two".
    For now, Chinese premium sales remain a tiny share of
Europe's market, though they are growing rapidly.
    Zeekr's European sales more than tripled to 9,525 vehicles
in the first nine months of 2026 from 3,025 a year earlier.
Having entered 22 European markets, Zeekr plans to expand into
another eight this year, European CEO Lothar Schupet said.
    "Our starting point where we are now is very strong and we
will keep on accelerating," he said.
    Avatr's Li said the brand plans a gradual expansion across
Europe, starting with Spain, Britain and Denmark in 2027,
followed by Germany and a handful of other countries in 2028.
    "We have only one chance to get this right," he said.  
    ($1 = 0.8904 euros)

    (Reporting by Nick Carey. Editing by Mark Potter)
 ((nick.carey@thomsonreuters.com; +44 7385 414 954;))