Chinese automaker Changan has announced its entry into the German market with plans to sell cars in Europe. This development comes as Volkswagen faces uncertainty regarding its German factories, partly due to increasing competition from China.
Changan establishes presence in Munich
The Chinese state-owned automaker Changan, based in Chongqing, is the latest competitor to expand into Germany. On Tuesday evening, Changan announced via the social media platform Weibo that it had registered a subsidiary in Munich. This new German branch will focus on vehicle sales, market research, and certifications, as part of Changan’s strategy to strengthen its presence in the European market. The company also revealed plans to hold a European launch event later this year. Changan already operates a design center in Munich.
This announcement coincides with a broader debate about the future of Germany as an automotive hub. Earlier this week, Volkswagen’s management questioned the viability of its German factories and reconsidered its employment guarantees. The challenges faced by Volkswagen are closely tied to the rise of Chinese competitors, who have overtaken VW in China and are now expanding globally.
Changan’s success in electric mobility
Changan, one of China’s largest vehicle manufacturers and exporters, has been more successful than many other state-owned firms in transitioning to electric mobility. According to Shanghai-based consultancy Automobility, Changan holds a 6% market share in both internal combustion engine (ICE) vehicles and electric vehicles (EVs). In addition to its joint ventures with international companies like Ford and Mazda, Changan has developed its own electric brands. The automaker’s key partners in this transformation include CATL, the world’s leading battery manufacturer, and technology giant Huawei.
While other Chinese automakers have struggled in Germany, Changan’s entry into the market could intensify competition. BYD, the dominant player in China’s electric car market, recently took over its German distribution partner following weak sales. Great Wall Motor announced in May that it would close its European headquarters in Munich. Nio, another Chinese start-up, has opened stylish showrooms but has only sold a few hundred vehicles in Germany this year. So far, only two Chinese electric brands, Polestar (part of the Geely group) and MG Roewe (owned by the Shanghai state enterprise SAIC), have sold over 1,000 vehicles in Germany by the end of July. With Changan entering the fray, competition in the European electric vehicle market is set to increase.
