Quo Vadis, Chinese OEMs in Europe? Part 3

Munich, October 2022

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Quo Vadis, Chinese OEMs in Europe? Part 3

Munich, October 2022
W

hy the new market entrants can only gain sales traction in a well-functioning ecosystem with the right partners

This is the third and final article in our short series that focuses on the performance of Chinese OEMs (old and new) in Europe. Following the previous article, we take a hard look at the ecosystem around market entrants from China and what needs to be put in place for a successful rollout.

In our previous article, we listed the difficulties for Chinese OEMs to enter the Western European market. We also pointed out market entry strategy directions in terms of short-term, mid-term, and long-term planning.

Within this article, we would like to talk about how to take the first steps into the mature European market. How to conduct the entry comprehensively and agile plus the various key aspects that need to be in place to ensure success in setting up the business and sales model.

Authors
Dr. Jan Burgard

Berylls Group CEO

Willy Wang

Managing Director China

Hongtao Wei

Associate Partner

Soleiman Mansouri

Associate Partner

Lois Yang

Lead Analyst

The hard truth: Compelling cars don’t sell themselves

The European market is a tough environment, extremely clustered and, it is dominated by local brands that have already gained customers’ trust and loyalty. Competitive new entrants, like Tesla, and Lucid are further big threats. As such, Chinese OEMs must find the appropriate spot – the right business model to enter this market. At the core this means playing to their full strength which is “customer-centricity”. However, without setting up the ecosystem around their customers, this strength will not help gaining sales traction. And as we mentioned in our last article, not even maturing and compelling products will sell on their own. For instance, how do customers get to test drive a Chinese car without a partner that provides facilities and personnel to organize them? But let us discuss this step by step. In fact, let’s jump into the driver seat and live the path of the European customer on how to purchase/own a car?

A new customer segment for Chinese OEMs

First of all, customers in Europe, in general, are different from those in China but moreover the respective grouping of customers. The number of corporate customers (B2B) is significantly higher than that of individual customers (B2C), and the proportion of corporate can reach up to 70%. For these users, leasing instead of purchasing (with or without credit) is the preferred choice.

Individual customers have more options. They can purchase a car directly from the dealer with full payment; they can use credit to buy a car; they can lease a car; they can use subscription mode for their mobility needs, etc. Unlike Chinese customers’ purchasing behavior, direct purchase has a lesser significance for them.

Between a rock and a hard place of Sales models

To satisfy the different demands of European customers, there are various sales model setups that can be observed in Europe:

  • the traditional wholesale and dealer setup,
  • and, often mixed with agent model – the preferred option for transformation towards more customer-centricity

From a market entrant perspective, the traditional wholesale with dealers is the easiest way to set up the business model as it can be quickly deployed. But there are still some historical challenges to face with this traditional approach, such as:

  • in-transparent pricing
  • loss of customer data
  • uncontrollable customer experience

As a result, most new players (especially the tech-industry-rooted ones) choose to enter the new markets with agent models.

Thus, pure own retail seems to be the ideal model for new players to obtain maximum control. However, it requires a large amount of capital investment, a long lead time and it cannot be applied to all Chinese OEMs.

To define the right business and sales model, OEMs need to evaluate all influencing factors carefully and comprehensively, including internal targets but most importantly external factors which cover, for instance market structure, competitors and not to forget customer segments (at the very least B2B vs. B2C).

One partner alone will not do the trick

Based on the challenges of the different business and sales models alone, it’s obvious that a market entry cannot be done successfully without partnerships.

From our perspective, to cover the high variety of customers, there are at least four partner types a Chinese OEM needs to consider:

  1. The Market Intelligence partner, is the key partner to understanding the core challenges and patterns of the European market
  2. The Distribution partner (e.g., automotive dealers), as the sales executive, plays an important role in the physical customer interface
  3. The Financial Service partner, the important influencing factor for the various purchase transaction types
  4. The New Sales Model partners in particular, Subscription Service Providers

 

As we described in our previous articles, understanding the European Markets is the key to unlocking the success story of the respective market entrants. For that the right Market Intelligence partners are required. It is of utmost importance to acquire critical knowledge in the decisive market factors, such as:

  • Creating awareness of all legal and macro influence factors
  • Aligning with key trends
  • Understanding the customers and their needs
  • Creating transparency on market players

Based on this holistic understanding only, the right strategy and guard rails can be set for success.

While the Distribution partner topic seems to be obvious, it’s important for Chinese OEMs to find reliable and large dealers who are willing to invest (e.g., retail marketing). Considering the ongoing shift towards agent models by Western OEMs, dealers are squeezing their respective profit margins of their current business. Hence, we believe that most retailers are eager to cooperate with Chinese players.

As a matter of fact, we strongly recommend Chinese OEMs to set up a dealer partnership. This should be the first step when entering such a complex market as the European one. It enables physical showroom construction which provide the space for the decisive product experience and most significantly, customer experience services like test drives and consultation.

Besides traditional dealerships, Chinese OEMs ought to consider opening experience points, such as Brand Experience Centers, Flagship stores, or Pop-up stores, just to create market presence and touchpoints with customers.

Physical presence with respective customer experience (within the entire Customer Journey) is the door opener to the European markets. And an experienced dealer partner can significantly accelerate the penetration in terms of physical presence.

Financial Services partners are also of utmost importance due to the described B2B/B2C market segments. Customers are attracted by products presented online and in physical outlets, the conversion to a real sale requires offering the right financial solution. Customers, for instance in the Southern European markets, mostly will only acquire their new car if the right financing product is offered. Without these financial services, B2B sales and a substantial portion of the B2C business won’t be possible. European customers will expect the same availability of various financial options compared to the offering of Western OEMs’ (i.e., flexible leasing, combinations of leasing and financing, etc.)

In addition, we recommend New Sales Model partners such as subscription expert companies aligning to the new market trend of short-term ownership. Committing to a product from an unknown brand for ten thousand of Euros is certainly not an easy decision, but a short-term subscription (let’s say: 1-3 months) with adequate monthly fees can provide the first step into experiencing these new products on the market.

Lost in translation – what “doing business” and “partnership” mean

As these issues all rely on partners, Chinese entrants need to start their partnering exceedingly early on. They need to find committed partners with a strategic fit to the core values of their respective brands to be successful.

Key questions may arise for acquiring the most suitable partners:

  • What is the most suitable corporation mode?
  • How to find trustworthy partners?
  • How to gain trust from the desirable partner?
  • How to negotiate a roadmap with them towards the final goal?
  • Who is responsible for which criteria of the partnership?
  • How to set up KPIs? How to answer their questions?
  • How to prioritize the process?

These are real-life problems confronted by Chinese OEMs currently. Furthermore, there are crucial aspects that can empower a swift partnership or hinder it. Some Asian entrants, for instance, required many years to set up their first strategic partnerships without a clear path on what to be achieved in the coming years. One of these core challenges is the difference in cultural understanding of “how to do business” and what “partnership” means.

While the European approach is rather streamlined and all aspects of negotiations are based on a clear vision, strategy, and milestones, the Chinese way is based more on an iterative process with nothing being carved in stone – sometimes meaning that even contracts sought to be renegotiated. This leads to obvious frustration on both sides.

In order to proactively prevent such frustration, the following aspects are required to successfully launch a partnership:

  • Clear market understanding on all influencing factors
  • Described business scope and model
  • Defined strategy and clear targets with KPIs for the coming years (e.g., revenue, retail points, price strategy, customer touchpoints)
  • Roles and responsibilities (internally and with partners)
  • Proper blueprint and toolkit preparation
  • Intercultural and communication training

At Berylls, we have deep international experience in solution findings about the “Go-to-Market” topic and we think ecosystem/partnership management is one of the most crucial success factors. We are interlinked with widespread relationships with many automotive participants in Europe. As such, we can provide you a name list of partners altogether with detailed Berylls inputs. We join our clients in the selection process of the most suitable potential partners and accompany the whole negotiation process.

Besides, our dedicated “Berylls partnership management guidebook” will address most of the key questions concerned by partners and give clear guidance for all references. Also, our diverse and international team has a significant understanding of cultural and communication challenges, as we are passionate and compassionate to help our clients in their success.

With this part, we conclude our short series on Chinese OEMs’ performance in Europe. Missed the other parts? Find the complete series here and stay tuned for further insights from the China team.

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Willy Wang

Willy Lu Wang (1981) joined Berylls Strategy Advisors in 2017. He started his career participating in the graduate program of Audi focusing on production planning. After stations at another strategy consultancy as well as being the strategy director for a German Tier-1 supplier, he is now responsible for the China business at Berylls.

He has a broad consulting focus working for all clients in China, whether they are JVs, WOFEs or pure local players. He is also responsible for the development of AI and Big Data products dedicated towards the Chinese market further strengthening the Berylls End-to-End strategy and product development capabilities.

Wang studied Electronics & Information Technology with focus on Systems and Software Engineering and Control Theory at Karlsruhe Institute of Technology.

Hongtao Wei

Hongtao Wei (1988), Associate Partner, joined Berylls Strategy Advisors in 2015, an international strategy consultancy specializing in the automotive industry, where he focuses on all issues related to the Chinese automotive market. In addition to Western manufacturers in China, his clients also include Chinese OEMs, investors, provincial governments, and state-owned enterprises.

He has profound expert knowledge in the areas of sales and aftersales. His other areas of expertise include digitalization, connectivity, and turnaround management.

He studied Sinology, Economics and Statistics at the Ludwig-Maximilians-Universität in Munich.

Soleiman Mansouri

Soleiman joined the Berylls Group in March 2022. He has set his focus on customer-centrist solutions, gaining experience in Product- and Corporate Strategy, Consulting with the focus on the OEM business. His Automotive career started with digitalization of the Aftersales of an US OEM in Europe and took him to China to the leading German OEM group, heading the Product and Portfolio department. He gained intensive consulting experience with one of the top management consulting firms and as a freelance consultant. Before joining Berylls, he was the Director Go-to-Market of one of the top Chinese OEMs supporting their entrance into the EU market. Soleiman is a graduated M.A./MBA in International Business from the University of Hamburg and ECUST/Shanghai.

Soleiman joined the Berylls Group in March 2022 and is part of the Asia-team, responsible for supporting all players in a successful market entrance. Also, provides profound expertise of customer-centric Product Marketing and Portfolio Strategy approaches to our clients.

Soleiman is expert in customer-centric Product-/Portfolio Strategy, Go-To-Market, Corporate Strategy and Entrepreneurship.

Pressemitteilung

Pressemitteilung: Mit Berylls Know-How und Expertise – WisdomTree erweitert ETF-Palette

München, September 2022

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Pressemitteilung: Mit Berylls Know-How und Expertise - WisdomTree erweitert ETF-Palette

München, September 2022
D

er WCAR genannte ETF ist der erste Index, der ausschließlich Unternehmen der globalen Wertschöpfungskette innerhalb der Mobilitäts- und Automobilindustrie zusammenfasst.

München, Frankfurt, 27.September 2022: Berylls, LeanVal Research und WisdomTree, der Sponsor börsengehandelter Fonds (ETF) und börsengehandelter Produkte (ETP), geben die Einführung des WisdomTree Global Automotive Innovators NTR UCITS ETF (WCAR) Index be-kannt.
Der WCAR ist der erste Index, der das gesamte globale Ökosystem der Automobilindustrie abdeckt und die zukunftsorientierten Strategien der Unternehmen berücksichtigt, indem er die 100 relevantesten und vielversprechendsten börsennotierten Unternehmen weltweit um-fasst. Der Index ist damit sortenrein und umfasst die folgenden Sektoren innerhalb der Auto-mobilindustrie: OEMs, Zulieferer, Autohändler, Mobilitätsdienstleister und Infrastrukturanbie-ter. Dadurch kann der ETF auch alle Megatrends erfassen, die den Wandel der globalen Auto-mobilindustrie prägen. Diese sind Konnektivität, autonomes Fahren, geteilte Mobilität und Elektrifizierung.

Bei der Entwicklung des WCAR ist WisdomTree eine Partnerschaft mit Berylls und LeanVal Research (LeanVal) eingegangen. Berylls, im Jahr 2011 gegründet und bis heute auf nahezu 200 Mitarbeiter gewachsen, hat einen klaren Fokus auf die Trends, die die Zukunft der Mobilitätsbranche prägen. Damit besitzt Berylls einen einzigartigen und vollumfassenden Überblick über das Universum der Unternehmen, die von den Megatrends der Mobilität profitieren werden. Die Auswahl, der für den WCAR selektierten Unternehmen basiert dabei auf einer automatisierten Analyse von mehr als 20 unabhängigen, quantitativen, proprietär durch Berylls entwickelten Kennzahlen, die die Strategie, Wertschöpfung, und Wahrnehmung der einzelnen Unternehmen erfassen und vergleichbar machen. Bei der Unternehmensauswahl für den WCAR arbeitet Berylls eng mit LeanVal zusammen. Das Equity-Research-Unternehmen, gegründet im Jahr 2017, verfügt über eine umfängliche Expertise in der Analyse, Bewertung und Auswahl von Aktien sowie in der Entwicklung von Aktienstrategien auf Basis hochwertiger Daten.

 

Weitere Informationen finde Sie in unserem Download – jetzt herunterladen!

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Pressemitteilung: Mit Berylls Know-How und Expertise - WisdomTree erweitert ETF-Palette
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Autor
Christian Bangemann

Head of PR & Media Relations

Dr. Jan Burgard

Dr. Jan Burgard (1973) ist CEO der Berylls Group, einer internationalen und auf die Automobilitätsindustrie spezialisierten Unternehmensgruppe.
Sein Aufgabengebiet umfasst die Transformation von Luxus- und Premiumherstellern, mit besonderen Schwerpunkten auf Digitalisierung, Big Data, Start-ups, Connectivity und künstliche Intelligenz. Dr. Jan Burgard verantwortet bei Berylls außerdem die Umsetzung digitaler Produkte und ist ausgewiesener Spezialist für den Markt China.
Dr. Jan Burgard begann seine Karriere bei der Investmentbank MAN GROUP in New York. Die Leidenschaft für die Automobilitätsindustrie entwickelte er während Zwischenstopps bei einer amerikanischen Beratung und als Manager eines deutschen Premiumherstellers.
Im Oktober 2011 komplettierte er die Gründungspartner von Berylls Strategy Advisors. Die Top-Management-Beratung ist die Basis der heutigen Group und weiterhin der fachliche Nukleus aller Einheiten.
An das Studium der Betriebs- und Volkswirtschaftslehre, schloss sich die Promotion über virtuelle Produktentwicklung in der Automobilindustrie an.

The valuation game – What recent automotive transactions and ESG-Criteria tell us about current automotive stock valuations

Munich, September 2022

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The valuation game - What recent automotive transactions and ESG-Criteria tell us about current automotive stock valuations

Munich, September 2022

The Porsche question – value creation by separation?

Our new ETF tracks the top 100 automobility companies with the greatest potential to shape the industry’s future – and the index’s performance offers valuable insights for auto CEOs and CFOs

Volkswagen is targeting a valuation of between €70bn and €75bn for Porsche when the sports car brand is listed as a standalone company on the Frankfurt stock exchange later this month. This is not far off Volkswagen’s current market cap of €90bn, which is not expected to drop materially after the IPO. So why are the two valued so much more highly as separate companies?

The short answer is that Volkswagen’s stock is chronically undervalued. Archrival Toyota has been trading at between two and three times the stock market value of VW for at least the past three years. The contrast with newer OEMs is even starker – Tesla, Li Auto and NIO produce far fewer cars, but on a per vehicle basis, have a market value that is 20 to 90 times higher that of Volkswagen, BMW and Mercedes, which are similarly undervalued.

They too have attempted to remedy this situation, Mercedes by spinning off its truck division in 2021 and BMW by launching a €2bn stock buyback program earlier this year, but neither change has resulted in a significant reevaluation of the shares.

The fundamentals of revenue, profitability and shareholder returns alone cannot explain these disparities in valuation. Nor can differences of such magnitude be explained away by putting them down to hype or irrational investment strategies. We believe a broader type of assessment is required, one that takes in investor sentiment and market cap, but also resilience to external shocks such as the war in Ukraine, the ongoing disruption of global supply chains, and the larger transformation of the automotive sector as a whole.

A new automotive index with a different approach to valuation

This is why Berylls, with our partners LeanVal and WisdomTree, has launched the WisdomTree Global Automotive Innovators UCITS ETF (WCAR). The index tracked by WCAR is made up of the 100 most relevant and promising publicly listed automotive companies worldwide, and is the first to cover the entire global automobility ecosystem. As well as original equipment manufacturers (OEMs), the index includes suppliers, dealer groups, mobility service providers, and infrastructure companies.

The 100 index members are selected based on a comprehensive set of criteria that looks beyond company financials. It also considers strategy, the value of the network they are part of, and investor sentiment.

The highly automated, twice yearly rebalancing of the index draws on quantitative data analysis, semantic data crawling and core financials. Tracking of the index started in 2019, and there are already indications that the investment approach can yield pertinent insights for automobility CEOs and CFOs seeking to improve their company’s stock market performance.

Lesson #1 – Identify the hidden value of future potential

For an index to be truly representative of an industry as complex as automotive, it needs to protect against the bias inherent in under- and overvalued stocks. The WisdomTree Global Automotive Innovators index does this by assessing a company’s strategy, value network and investor sentiment, as well as its core financials. This means stock selection is based on overall performance, not current market valuations. The index share of any one stock is also capped at maximum 2.5 percent at each rebalancing.

The WisdomTree Global Automotive Innovators index further over-represents the stocks of newcomers that have the potential to be more influential in shaping the automotive future than their present-day valuation suggests. In an industry that has often been re-shaped by hidden champions, we believe this approach makes the index a true indicator of the automotive future.

Lesson #2 – OEMs are not the only winners

In 2021, many OEMs posted record profits. However, on the WisdomTree Global Automotive Innovators index, dealer groups have clearly outperformed manufacturers since at least beginning of 2021, indicating that they were able to pocket a bigger share of the additional earnings that resulted from offering fewer customer discounts amid global production shortages.

Margins are always a function of the relative bargaining power of the different players that make up an industry’s value chain. Although the vehicle shortage will be a temporary phenomenon, OEMs should take cues from the strong performance of their retailers to manage business risks more actively themselves rather than offload them on to their suppliers and business partners. Only thus can OEMs ensure they get the full upside potential too.

Lesson #3 – Japanese automotive companies have the momentum

The pace of recovery from the combined effects of Covid-19 and global supply shortages remains very uneven across the world’s leading automotive manufacturing regions. Japanese auto companies (OEMs and suppliers alike) were relatively late in their recovery but have shown the strongest growth momentum over recent months, and are now attracting significantly higher valuations than German OEMs, for example. It seems that their Japan-centered supply chains prove more resilient in the current crisis than do the European OEMs’ globally more fully integrated supply networks.

Lesson #4 – IPOs aren’t the only way to avoid being hit by a “conglomerate discount”

Part of the reason that German OEMs remain undervalued is that capital markets have come to dislike industrial conglomerates. Both the Daimler truck spin-off and the Porsche IPO can be seen as evidence of OEMs trying to respond to this change in investor expectations.

It is worth noting then, that the index shows that breaking themselves up is not the only way OEMs can avoid paying a conglomerate discount. China’s Geely has succeeded in convincing investors of the advantages of operating through a single holding structure. In other areas of the automobility ecosystem – notably battery cell and chip production and vehicle software development – capital markets actually reward a high degree of integration. This is because these areas will shape the automotive future to a much greater extent than other, more traditional areas of automotive value creation.  

Lesson #5 – ESG will evolve from a screening factor to a key differentiator

Currently, the WisdomTree Berylls LeanVal Global Automotive Innovators index uses ESG criteria only as a screening factor. In part this is because there is not yet a complete and universally accepted set of ESG investment criteria.

However, we’re already seeing a strong correlation between ESG scores and stock performance among the 100 index companies. Our sentiment analysis shows that investors see ESG compliance as an indirect indicator of a company’s willingness to innovate as well as a direct indicator of a company’s ability to mitigate business risks.

 

The influence of ESG criteria shows that many investors are already looking beyond fundamentals to build a more accurate picture of a company’s value and growth potential. Strong ESG commitments are likely to become even more important in the future, and the links investors are drawing with innovation and risk management make clear the massive transformation that has already started in the way automotive stocks are valued.

The partnership

WisdomTree Investments, Inc. (WisdomTree) is an ETF and ETP sponsor and asset manager headquartered in New York. WisdomTree offers products covering equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency and alternative strategies. WisdomTree currently has approximately $77.8 billion in assets under management globally. 

LeanVal Investments (LeanVal) was founded in 1991. The team combines extensive industry and academic experience and employs a data-driven approach to fundamental research and the design of equity strategies.

Berylls Strategy Advisors GmbH (Berylls) was founded more than a decade ago and today, with almost 200 colleagues, brings a clear focus to the trends shaping the future of the automobility industry. Berylls’ dedicated automotive industry expertise allows them to form bottom-up views on the universe of companies poised to benefit from automobility megatrends.

Authors
Dr. Jan Burgard

CEO Berylls Group

Malte Broxtermann

Associate Partner

Jens Garrelfs

Associate Partner

Björn Simon

Consultant

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Malte Broxtermann

Malte is an expert in the development and implementation of automotive digitization strategies.

He focuses on helping clients scale (generative) artificial intelligence to improve their bottom line across the entire automotive value chain. His primary customers are automotive manufacturers and their suppliers, especially those active in the Software-Defined-Vehicle space.

Before his time at Berylls by AlixPartners (formerly Berylls Strategy Advisors), he advised leading North American utility companies. Prior to that, he saved lives as emergency medical technician. Malte holds master’s degrees in economics from Maastricht University and Queen’s University in Canada.

Top 100-Zuliefererstudie 2022 – Die Branche kommt nicht zur Ruhe

München, September 2022

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Top 100 Zuliefererstudie 2022 - Die Branche kommt nicht zur Ruhe

München, September 2022
H

albleitermangel, Rohstoffpreise, Pandemie und Lockdown sind Schlagworte, die uns in den letzten zwei Jahren in Mark und Bein übergegangen und aus unserem Wortschatz – leider – nicht mehr wegzudenken sind.

Dies gilt insbesondere für die Automobilindustrie, welche so stark wie kaum
eine andere Industrie von den jüngsten Krisen betroffen war. Das ist das Hauptthema im Artikel „Halbleiter, Rohstoffe und Pandemie – die Automobilzulieferer kommen nicht zur Ruhe“ von Dr. Alexander Timmer, Dr. Jürgen Simon und Lukas Kirchhefer (Seite 17).
Seit der Finanzkrise galt die Automobilindustrie als sicherer Hafen und war ein Synonym für kontinuierliches Wachstum. Umsatzwachstum und Margen im hohen einstelligen Prozentbereich waren normal und galten als Industriestandard. Fakt ist, dass die Zeiten der Planbarkeit vorerst vorbei sind. Zur Wahrheit gehört aber auch, dass sich Hersteller und Zulieferer weltweit schneller von der Krise erholt haben als noch vor zwei Jahren gedacht.

Unsere Analyse der weltweit 100 größten Zulieferer zeigt, dass Gewinne und Umsätze wieder auf dem Vorkrisenniveau aus 2019 liegen. Einestolze Leistung, wenn wir uns in Erinnerung rufen, dass die Umsätze noch vor zwei Jahren infolge der Pandemie um 14 % eingebrochen und die Gewinne auf ein historisches
Tief von 3 % gesunken waren. „Trotz der Aufs und Abs im Jahr 2021 mit Coronakrise im Frühjahr und Chipmangel im Herbst sind die Ergebnisse in Summe positiver ausgefallen, als wir das erwartet hatten“, bewertet mein Kollege Dr. Jan Dannenberg in unserem Doppelinterview (Seite 11) die
jüngste wirtschaftliche Erholung. Zu den klaren Profiteuren gehören die Halbleiterhersteller, mit rekordverdächtigen Margen von bis zu 27 %.

Dies belegt eindrucksvoll: Totgesagte leben länger. Die öffentliche Debatte zur
Zukunftsfähigkeit der Automobilindustrie war in den letzten Jahren maßgeblich geprägt durch fehlende Nachhaltigkeit der Geschäftsmodelle und nicht
zeitgemäße Produkte. Zulieferer wie Hersteller haben jedoch die Zeit in der
Krise wirkungsvoll genutzt und ihre Hausaufgaben gemacht. So riefen sie Kostensenkungsprogramme ins Leben und investierten in die Widerstandsfähigkeit der Lieferketten. Hier ist aber nur in seltenen Fällen eine Rückverlagerung das Mittel der Wahl. Im Fokus steht neben dem Aufbau von Beständen und Alternativlieferanten auch die digitale Überwachung der Lieferketten. Das beschreibt mein Kollege Ralf Walker im Artikel „Pandemie, Chipmangel und politische Unruhen – kommt jetzt die Rohstoffkrise?“ (Seite 5), der in Zusammenarbeit mit Peter Trögel, Christian Grimmelt und Eren Duygun entstanden ist.

Die Mehrzahl der deutschen Zulieferer haben ihre Strategien überarbeitet, um
die Abhängigkeit vom Verbrennungsmotor sukzessive zu reduzieren. Gleiches
gilt für die Hersteller, die ihre Portfolios schneller und konsequenter auf batterieelektrische Fahrzeuge umstellen. Wir können konstatieren, dass sich die Automobilindustrie nicht nur einen Ruf als versierter Krisenmanager, sondern auch als treibende Kraft für den Umstieg auf die Elektromobilität erarbeitet hat. Weiter so!

Der Rückblick auf den Umgang mit den Herausforderungen der letzten Jahre
sollte uns zuversichtlich stimmen, dass wir auch die Folgen des Ukraine-Krieges
und der chinesischen No-Covid-Strategie meistern werden. Dennoch: „Wir sind
nicht an dem Punkt, wo sich Lösungen für die vielfältigen Probleme abzeichnen.
Da sind wir noch lange nicht durch.“, wie es Jan Dannenberg abschließend zusammenfasst. Zumal der Wettbewerb aus China nicht schläft!

Ich wünsche Ihnen eine spannende Lektüre,

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Top 100-Zuliefererstudie 2022
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Autoren
Dr. Jan Dannenberg

Executive Partner

Dr. Alexander Timmer

Partner

Dr. Jürgen Simon

Associate Partner

Dr. Jan Dannenberg

Dr. Jan Dannenberg (1962) ist seit 1990 Berater der Automobilindustrie und seit Mai 2011 Gründungspartner bei Berylls Strategy Advisors. Bis zum Frühjahr 2011 war er acht Jahre international als Partner – davon fünf Jahre als Associate Partner – für Mercer Management Consulting und Oliver Wyman tätig. Er ist ausgewiesener Spezialist für Innovationen und Markenmanagement in der Automobilindustrie und berät im Schwerpunkt Zulieferer und Investoren zu Strategie, Mergers & Acquisitions und Performance Improvement. Zudem ist er Geschäftsführer von Berylls Equity Partners, eine auf Mobilitätsunternehmen spezialisierte Beteiligungsgesellschaft.

Bachelor of Arts in Volkswirtschaftslehre von der Stanford University, Studium der Betriebswirtschaftslehre und Promotion an der Universität Bamberg.

Dr. Alexander Timmer

Dr. Alexander Timmer (1981) ist seit Mai 2021 als Partner bei Berylls by AlixPartners (ehemals Berylls Strategy Advisors) tätig, einer internationalen und auf die Automobilitätsindustrie spezialisierten Strategieberatung. Er ist Experte für Markteintritts- und Wachstumsstrategien, M&A und kann auf eine langjährige Erfahrung im Operations-Umfeld zurückschauen. Dr. Alexander Timmer berät seit 2012 Automobilhersteller und -zulieferer im globalen Kontext. Er verfügt über ein fundiertes Expertenwissen in den Bereichen Portfolioplanung, Entwicklung und Produktion. Zu seinen weiteren fachlichen Schwerpunkten zählen unter anderem Digitalisierung und der Themenkomplex rund um die Elektromobilität.
Vor seinem Einstieg bei Berylls Strategy Advisors war er unter anderem für Booz & Company und PwC Strategy& als Mitglied der Geschäftsführung in Nordamerika, Asien und Europa tätig.
Im Anschluss an sein Maschinenbaustudium an der RWTH Aachen und der Chalmers University in Göteborg promovierte er im Bereich der Fertigungstechnologien am Werkzeugmaschinenlabor der RWTH Aachen.

Dr. Jürgen Simon

Dr. Jürgen Simon (1986) ist als Associate Partner bei Berylls by AlixPartners (ehemals Berylls Strategy Advisors) tätig, einer internationalen und auf die Automobilitätsindustrie spezialisierten Strategieberatung. Er ist Experte für Vertriebs- und Unternehmensstrategien sowie M&A und kann auf eine langjährige Beratungserfahrung zurückschauen. Er berät seit 2011 Automobilhersteller und -zulieferer und verfügt über fundiertes Expertenwissen in den Bereichen ganzheitliche Strategieentwicklung, Geschäftsmodelle und Commercial Due Diligence. Weitere Schwerpunkte liegen in Markteintrittsstrategien sowie Themen rund um das „Software Defined Vehicle“. Als diplomierter Ökonom der Universität Hohenheim hat er vor seinem Einstieg bei Berylls am Institut für Unternehmensführung des Karlsruher Instituts für Technologie (KIT) promoviert.

How Vehicle-as-a-Service is accelerating BEV sales in Europe

Munich, September 2022

Featured Insights

How Vehicle-as-a-Service is accelerating BEV sales in Europe

Munich, September 2022
T

he intensifying trend from vehicle ownership to usership has already been proven by our recent customer survey. VaaS providers are now echoing our results: The demand for flexible and digital VaaS products is increasing and fuels BEV sales in Europe.

In January 2022, we published a survey asking a representative set of customers on their future mobility needs. The results were clear: Customers increasingly demand flexible VaaS products, they will choose fully digital online journeys more often and they are willing to try new brands and drivetrains. Hence, VaaS also drives digitalization in vehicle sales and contributes to BEV adoption.

To complement the customer perspective, we now asked some of the leading providers how they perceive the trend towards VaaS, how they assess its implications and how they plan to act upon it. In our latest study we interviewed:

  • Benedikt Schell, CEO, Mercedes-Benz Bank
MBB_logo_64x2_s
  • Enrico Rossini, Head of Fleet and New Mobilities, Mobilize Financial Services
Mobilize Financial Services logo
  • Dirk Adelmann, CEO, smart Europe

  • René Müller, Head of B2B Sales, smart Europe
54abc52b-b04b-47cd-ba52-c565fba61822
  • René Müller, Head of B2B Sales, smart Europe
  • Dr. Christian Dahlheim, CEO, Volkswagen Financial Services
image001
  • Magnus Fredin, SVP Global Online Business, Volvo Cars
Volvo_Iron mark_b_Original
  • Daniel Garnitz, CEO, Faaren
faaren-group-logo-black
  • Niels Reimann, CPO, Fleetpool
M2W46X62Q3ZB5K2RLPW
  • Matthias Albert, CEO, ViveLaCar
ViveLaCar-Logo_1

By combining the customer survey with the perspectives of top executives in the industry, Berylls created the first 360 degree view on the Vehicle-as-a-Service market in Europe.

Can’t wait to read more? Download the insight now or visit our VaaS Clusterpage!

Berylls Insight
How Vehicle-as-a-service is accelerating BEV sales in Europe
DOWNLOAD
Authors
Christopher Ley

Associate Partner

Florian Tauschek

Associate Partner

Tobias Detzler

Senior Consultant

  • Benedikt Schell, CEO, Mercedes-Benz Bank
  • Enrico Rossini, Head of Fleet and New Mobilities, Mobilize Financial Services
  • Dirk Adelmann, CEO, smart Europe
  • René Müller, Head of B2B Sales, smart Europe
  • Dr. Christian Dahlheim, CEO, Volkswagen Financial Services
  • Magnus Fredin, SVP Global Online Business, Volvo Cars
  • Daniel Garnitz, CEO, Faaren
  • Niels Reimann, CPO, Fleetpool
  • Matthias Albert, CEO, ViveLaCar

By combining the customer survey with the perspectives of top executives in the industry, Berylls created the first 360 degree view on the Vehicle-as-a-Service market in Europe.

Can’t wait to read more? Download the insight now or visit our VaaS Clusterpage!

Christopher Ley

Christopher Ley joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in October 2021 as Partner. He has over 14 years of top management consulting experience with focus on new business models and market expansions within the automotive & mobility industry. He is an expert around Vehicle-as-a-Service, comprising vehicle finance & leasing, fleet management and mobility services. Christopher Ley is advising OEMs, Captives, Financial Services Companies, PE & VC Investors, Leasing & Rental Companies, Fleet Managers and Mobility Startups around the transformation from one-time sales towards use-based multi-cycle business models on a global level.

Prior to joining Berylls, Christopher Ley has been working for other international management consulting firms, amongst others Monitor Deloitte and Alvarez & Marsal. He holds a diploma degree in business administration from Johannes Gutenberg-Universität in Mainz and an MBA from Colorado State University.

Florian Tauschek

Florian Tauschek has 8 years of experience in strategy consulting. He focuses on business & sales model strategies for flexible Vehicle-as-a-Service (VaaS) offers.

He is an expert in topics such as customer & vehicle lifetime value optimization, the transformation of the underlying automotive sales model from one-time asset sales towards multicycle models generating recurring revenues as well as market entry strategies for various VaaS products such as operating lease or subscriptions. Furthermore he is the author of several market leading studies around VaaS.

He holds a Master of Science degree in management from HHL – Leipzig Graduate School of Management.

E-MOBILITY-RANKING

Munich, April 2025

Featured Insights

E-MOBILITY-RANKING

Munich, April 2025

Our new e-mobility country ranking 2024 evaluates the global progress of electric mobility across 35 countries and enables a direct comparison of national developments. Under the leadership of Berylls by AlixPartners Partner & Managing Director Dr. Alexander Timmer, the study assesses the relevance of battery electric vehicles (BEVs) in achieving climate goals and examines the evolution of charging infrastructure from 2019 to 2024.

As in previous years, countries in Scandinavia, Western Europe, and China continue to lead the way, with at least one in six newly registered vehicles being fully electric. However, the momentum in major markets like Germany, the UK, and China has slowed, with BEV sales stagnating or growing more slowly compared to prior years. 

For Germany, the 2024 ranking paints a mixed picture. “With stagnant BEV sales in 2023, Germany drops four positions and falls out of the Top 15,” says Dr. Alexander Timmer. “However, its charging infrastructure continues to expand rapidly, driven by strong competition in the ultra-fast charging segment and effective public funding programs.” Germany now boasts Europe’s second-largest charging network, just behind the Netherlands and narrowly ahead of France, and retains the title of having the largest ultra-fast charging network in Europe.

Our experts
Dr. Alexander Timmer

Partner

Dennis Koschmieder

Consultant

Lukas Kirchhefer

Consultant

TOP XEV COUNTRIES

Our Berylls TOP XEV country table shows key electromobility metrics for more than 30 countries worldwide since 2019. You can select the desired year using the drag-down "Years" menu and order the columns individually in ascending or descending order.

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Rank
Y-O-Y Change
Country
Region
New vehicle sales
Vehicle Fleet
Charging infrastructure
Ratio
BEV
PHEV
Total xEV
BEV
PHEV
Total xEV
ALL CHARGERS
ULTRA-FAST CHARGERS
INFRASTRUCTURE COVERAGE
xEV/CHARGER
BEV/FAST CHARGER
SHARE OF NEW SALES
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF NEW SALES
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF NEW SALES
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF FLEET
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF FLEET
(in %)
Y-O-Y
CHANGE
(in % points)
SHARE OF FLEET
(in %)
Y-O-Y
CHANGE
(in % points)
NUMBER OF CHARGERS
Y-O-Y CHANGE
(in %)
SHARE OF FAST CHARGERS
(in %)
NUMBER OF CHARGERS
Y-O-Y CHANGE
(in %)
NUMBER OF CHARGERS FOR 10.000 INHABITANTS
AREA COVERED BY ONE FAST CHARGER
NUMBER OF xEV PER CHARGER
Y-O-Y CHANGE
(in %)
NUMBER OF BEV PER FAST CHARGER
Y-O-Y CHANGE
(in %)
1
0
NORWAY
EUROPE
89%
7%
3%
-5%
92%
1%
27.3%
4%
6.7%
1%
34.0%
5%
30
23%
32%
8
33%
55
33
32
-11%
80
-11%
2
2
DENMARK
EUROPE
52%
15%
4%
-6%
56%
9%
12.0%
5%
4.5%
0%
16.5%
5%
31
118%
36%
3
208%
53
4
15
-33%
31
-51%
3
12
MALTA
EUROPE
38%
20%
7%
-6%
44%
14%
1.9%
1%
1.4%
0%
3.3%
1%
124
23%
3%
4
-/-
3
79
87
4%
1
-/-
4
-1
SWEDEN
EUROPE
35%
-4%
23%
2%
58%
-1%
7.7%
2%
7.6%
2%
15.3%
4%
53
45%
16%
7
95%
51
48
14
-7%
46
-27%
5
1
NETHERLANDS
EUROPE
35%
4%
14%
1%
48%
5%
6.0%
1%
4.0%
1%
10.1%
2%
183
26%
3%
4
53%
102
7
5
6%
111
10%
6
-1
FINLAND
EUROPE
30%
-4%
20%
-1%
50%
-5%
4.2%
1%
6.0%
1%
10.2%
3%
15
31%
27%
3
76%
29
71
18
2%
28
-7%
7
4
BELGIUM
EUROPE
28%
9%
15%
-6%
43%
3%
4.6%
2%
5.4%
1%
10.0%
3%
76
73%
6%
3
95%
65
7
8
-13%
64
7%
8
0
LUXEMBOURG
EUROPE
27%
5%
8%
-2%
36%
3%
7.5%
2%
4.2%
0%
11.7%
2%
2
14%
13%
307
97%
40
8
20
9%
101
-29%
9
-2
CHINA
ASIA
27%
4%
15%
3%
42%
7%
6.0%
1%
2.5%
1%
8.6%
3%
3
31%
54%
0
-/-
25
5
9
17%
11
-12%
10
-8
ICELAND
EUROPE
26%
-24%
16%
6%
42%
-18%
12.1%
4%
9.8%
3%
21.9%
7%
2
58%
21%
413
153%
65
187
21
-21%
56
-45%
11
3
PORTUGAL
EUROPE
20%
2%
14%
0%
33%
2%
2.8%
1%
2.2%
1%
5.0%
2%
12
66%
26%
698
149%
12
29
25
-9%
53
-17%
12
5
UNITED KINGDOM
EUROPE
20%
3%
9%
1%
28%
4%
3.8%
1%
2.1%
0%
5.9%
1%
97
33%
25%
17
275%
14
10
20
1%
52
-39%
13
-4
SWITZERLAND
EUROPE
19%
-2%
9%
-1%
28%
-2%
4.2%
1%
2.1%
0%
6.3%
1%
17
23%
17%
1
38%
20
13
17
4%
67
-19%
14
-4
AUSTRIA
EUROPE
18%
-2%
7%
0%
24%
-3%
3.8%
1%
1.4%
0%
5.2%
1%
30
63%
19%
3
91%
33
15
9
-21%
35
-29%
15
1
FRANCE
EUROPE
17%
0%
9%
-1%
25%
-1%
3.1%
1%
1.8%
0%
5.0%
1%
155
31%
19%
16
82%
23
18
12
0%
41
-28%
16
-4
IRELAND
EUROPE
14%
-4%
10%
2%
25%
-2%
3.0%
1%
1.8%
0%
4.8%
1%
3
27%
21%
350
64%
7
91
32
-3%
96
-22%
17
-4
GERMANY
EUROPE
14%
-5%
7%
1%
20%
-4%
3.9%
1%
2.6%
1%
6.6%
2%
159
33%
21%
26
66%
19
10
20
5%
58
-14%
18
3
KOREA
ASIA
9%
1%
1%
0%
9%
1%
2.5%
1%
0.0%
0%
2.5%
0%
0
-100%
-/-
0
-/-
0
-/-
-/-
-/-
-/-
-/-
19
3
USA
AMERICA
8%
0%
2%
0%
10%
1%
1.7%
0%
0.6%
0%
2.3%
1%
197
12%
25%
32
28%
6
161
-/-
-/-
-/-
-/-
20
8
CYPRUS
EUROPE
8%
3%
4%
1%
12%
4%
0.3%
0%
0.2%
0%
0.6%
0%
512
56%
7%
10
43%
6
264
-/-
-/-
-/-
-/-
21
-1
LATVIA
EUROPE
7%
-2%
5%
3%
12%
1%
0.8%
0%
0.2%
0%
1.0%
0%
1
116%
37%
205
266%
6
147
-/-
-/-
-/-
-/-
22
4
HUNGARY
EUROPE
7%
2%
5%
0%
12%
1%
1.5%
0%
0.7%
0%
2.3%
1%
4
26%
18%
451
158%
4
116
-/-
-/-
-/-
-/-
23
-5
ROMANIA
EUROPE
6%
-4%
0%
-2%
6%
-6%
0.5%
0%
0.2%
0%
0.7%
0%
4
66%
35%
551
152%
2
144
-/-
-/-
-/-
-/-
24
5
GREECE
EUROPE
6%
2%
6%
-1%
12%
1%
0.3%
0%
0.5%
0%
0.8%
0%
7
123%
11%
231
344%
7
170
-/-
-/-
-/-
-/-
25
-6
SLOVENIA
EUROPE
6%
-3%
2%
0%
8%
-3%
1.3%
0%
0.3%
0%
1.5%
0%
2
34%
15%
152
79%
10
61
-/-
-/-
-/-
-/-
26
-5
LITHUANIA
EUROPE
6%
-2%
6%
3%
11%
1%
0.9%
0%
0.7%
0%
1.6%
0%
2
124%
32%
522
544%
10
66
-/-
-/-
-/-
-/-
27
-2
SPAIN
EUROPE
6%
0%
6%
-1%
11%
-1%
0.6%
0%
0.8%
0%
1.5%
0%
49
70%
20%
3
113%
10
51
-/-
-/-
-/-
-/-
28
-4
ESTONIA
EUROPE
5%
-1%
5%
3%
10%
1%
0.6%
0%
0.2%
0%
0.9%
0%
1
54%
35%
211
94%
8
117
-/-
-/-
-/-
-/-
29
3
CZECHIA
EUROPE
5%
2%
2%
0%
7%
1%
0.5%
0%
0.3%
0%
0.8%
0%
6
36%
28%
581
123%
6
43
-/-
-/-
-/-
-/-
30
0
ITALY
EUROPE
4%
0%
3%
-1%
8%
-1%
0.7%
0%
0.7%
0%
1.4%
0%
58
42%
17%
3
51%
10
29
-/-
-/-
-/-
-/-
31
-3
BULGARIA
EUROPE
4%
-1%
1%
0%
5%
-1%
0.6%
0%
0.2%
0%
0.9%
0%
3
86%
32%
405
155%
5
111
-/-
-/-
-/-
-/-
32
-1
POLAND
EUROPE
3%
-1%
3%
0%
6%
-1%
0.3%
0%
0.2%
0%
0.5%
0%
9
57%
29%
695
134%
3
113
-/-
-/-
-/-
-/-
33
0
CROATIA
EUROPE
3%
0%
2%
0%
5%
0%
0.5%
0%
0.4%
0%
0.9%
1%
1
71%
30%
141
29%
5
103
-/-
-/-
-/-
-/-
34
0
SLOVAKIA
EUROPE
2%
0%
2%
-1%
5%
-1%
0.5%
0%
0.4%
0%
1.0%
0%
2
34%
38%
401
122%
4
52
-/-
-/-
-/-
-/-
35
0
JAPAN
ASIA
1%
-1%
1%
0%
2%
-1%
0.3%
0%
0.4%
0%
0.7%
0%
54
13%
18%
0
-/-
4
37
-/-
-/-
-/-
-/-
-/-
-/-
CALIFORNIA
AMERICA
22%
0%
4%
0%
25%
0%
5.2%
1%
1.6%
0%
6.8%
1%
50
2%
26%
0
-/-
13
32
39
26%
115
6%
-/-
-/-
EUROPE
EUROPE
15%
0%
7%
0%
23%
-1%
3.1%
1%
2.0%
1%
4.5%
2%
1
39%
17%
109
92%
19
27
13
-5%
48
-25%

BEV – Battery Electric Vehicle, PHEV – Plug-in Hybrid Electric Vehicle, xEV = BEV + PHEV, Fast Charger (≥50 kW), Ultra Fast Charger (≥150 kW), Europe = EU countries + EFTA countries + United Kingdom

A backseat for drivers: Autonomous driving will be the backbone of shared urban mobility in Europe

Munich, October 2022

Featured Insights

A backseat for drivers: Autonomous driving will be the backbone of shared urban mobility in Europe

Munich, October 2022

Introduction

Autonomous driving (AD) has long been seen as the savior of shared mobility, finally making ride hailing and ride pooling services profitable by eliminating the cost of paying the driver. Pilot projects are underway across the globe, however the key question remains: when will AD technology, regulation and public acceptance align and reach the point where driverless vehicles start to transform the personal mobility landscape?

To answer this question and quantify the scale of the opportunity for AD to push forward the use of shared mobility services in Europe, we built the Berylls Mobility Model to assess the impact of key drivers including technology, political will and regulatory readiness on driverless urban mobility in 544 European cities across 35 countries.

The results of our extensive modeling show a decisive shift toward self-driving ride hailing and ride pooling services over the next decade. Our key findings include:

  • AD vehicles will account for 50% of the distance travelled with ride sharing services in European cities by 2035
  • The European urban mobility market will grow by 56% to €802bn by 2035, but the market share of private cars will shrink to 60%, from 67% now
  • By the end of 2035, we expect there will be between 500,000 and 1.2 million AD cars used for ride hailing and pooling
Berylls Insight
A backseat for drivers: Autonomous driving will be the backbone of shared urban mobility in Europe
DOWNLOAD
Authors
DR. MATTHIAS KEMPF

Partner

Yue Zhou

Senior Consultant

Yakop Tolunay

Consultant

Niklas Rehmert

Venture Builder

Dr. Matthias Kempf

Dr. Matthias Kempf (1974) was one of the founding partners of Berylls Strategy Advisors in August 2011. He began his career with Mercer Management Consulting in Munich, Germany, in 2000. After earning his doctorate degree and further consulting work at Oliver Wyman (formerly Mercer Management Consulting), he joined the management of Hilti Germany in 2008. At Berylls, his area of expertise is new mobility services and traffic concepts. In addition, he is an expert in developing and implementing new digital business models, and in the digitalization of sales and after sales.

Industrial engineering and management studies at the University of Karlsruhe, Germany, doctorate degree at Ludwig Maximilian University, Munich, Germany.

Quo Vadis, Chinese OEMs in Europe? Part 2

Munich, August 2022

Featured Insights

Quo Vadis, Chinese OEMs in Europe? Part 2

Munich, August 2022
I

s there a shortcut for Chinese OEMs in Europe?The second in Berylls’ short series on established and new Chinese OEMs in Europe focuses on their performance and the best market entry strategies.

Executive summary

  • With increasing electric vehicle (EV) adoption in Europe, Chinese OEMs see a fresh opportunity to re-enter Europe and even target the premium segment
  • The timing seems right because their products are more mature, while Chinese EV players have a more customer-centric mindset than previously and are open to new sales models
  • However, to succeed in Europe, Chinese OEMs will have to adapt their way of working, plan and implement rigorously, and penetrate markets rapidly
  • Lastly, Chinese OEMs must prioritize investments in building a sustainable, long-lasting brand reputation based on a highly professionalized ecosystem with great products at the core
Authors
Dr. Jan Burgard

Berylls Group CEO

Willy Wang

Managing Director China

Hongtao Wei

Associate Partner

Soleiman Mansouri

Associate Partner

Lois Yang

Lead Analyst

A window of opportunity

Boosted by government subsidies and emissions regulations, the EV market in Europe is now highly attractive, especially in western Europe. However, major multinational carmakers have not yet fully captured the rapidly expanding EV market, which means Chinese OEMs sense a great business opportunity. Since 2020, Chinese OEMs have successively launched EVs in Europe, re-entering a market where they first tried their luck more than a decade ago.

To a certain degree, there was a blank space in the electric vehicle market when Tesla first came to Europe in 2008. Faced with few competitive pressures, Tesla had the advantage of gradually being able to establish a firm foothold there. Today, although a gap in the market still exists, it is getting smaller. Traditional European players such as BMW, Mercedes-Benz and Volkswagen are introducing more and more EVs, while other specialist EV manufacturers such as the U.S. companies Lucid and Rivian are also targeting the European market.  

Chinese OEMs therefore have only a narrow time window to exploit Europe’s remaining, rapidly closing EV market space. The challenges of re-entering Europe are not so different from those they experienced in the past and whether they succeed this time principally depends on whether they can leverage their core strength, which is customer-centricity. In plain terms, it depends on whether they can really understand Europe’s kaleidoscope of national markets and customers in all their diversity. As a starting point, Chinese OEMs need to consider why their first foray into Europe ended in failure.

Why have Chinese carmakers failed in Europe in the past?

History and ideology

Compared with emerging markets in Asia, Africa and southeast Asia, most European markets are highly mature, with their own automotive cultures and tastes. Traditional OEMs such as Volkswagen, Mercedes-Benz and BMW have dominated these markets for a long time and still do so today in conventional internal combustion engine (ICE) vehicles. With certain exceptions, even well-known Asian brands such as Toyota and Honda have only limited influence in some western European markets.

The current success of Chinese-European brands like MG and Polestar suggests that “being born” in Europe brings higher acceptance by European customers. This is partly because purely Chinese brands are still young and naturally lack a heritage, both at home and abroad. In addition, recent political developments have increased the resistance of some European customers to Chinese products.

Different customer groups, different preferences

The preferences and demands of European customers are very different from their Chinese counterparts, but this is not a problem that can be solved by conducting a few simple market surveys. For instance, Chinese OEMs pay great attention to product features such as connectivity and infotainment functions to attract young Chinese customers. In Europe, the same strategy needs to be sensitive to different consumer priorities. While connectivity and infotainment influence European customers’ purchasing behavior, they are more attracted by “traditional virtues” such as build quality, material selection and driving performance. In this context, new hi-tech features are generally regarded as bonus items. In fact, Chinese OEMs actually often neglect European customers understanding. As they are quite successful in their home market, they often think that the same ingredients for success in China can be directly applied in Europe, especially when it comes to EVs. A fatal error!

Even when buying EVs, European customers favor brands with a strong reputation for high reliability and a wide network coverage for sales, aftersales and electric charging. Unfortunately, no Chinese brand has so far managed to provide the same level of product and service quality as “local” brands such as BMW and Mercedes-Benz.

Poor brand reputation
In the past, multiple poor performances in crash tests have made Chinese brands seem embarrassingly bad. Between 2005 and 2009, attempts by the Chinese Landwind and Zhonghua brands to launch in Europe were both stalled by dismal crash-test results. In 2005, the Chinese SUV Jiangling Landwind failed the German ADAC automobile club’s crash test shortly after being premiered at the Frankfurt IAA Motor Show. In similar fashion, the Zhonghua BS6 failed the Euro NCAP crash test. These PR disasters left European consumers with the stereotype that the quality of Chinese cars was highly questionable.

Can Chinese carmakers succeed where they previously failed?

The difference this time is that Chinese OEMs’ products have matured to the point where they are at least seen by European customers as generally competitive in the “traditional” sales virtues of build quality, use of high-grade materials and driving performance. Meanwhile, Chinese vehicles now also boast highly advanced new “bonus” features for European purchasers such as world-class connectivity and autonomous driving. Lastly, Chinese OEMs are used to building their products in a customer-centric way, with features such as seamless integration of mobile phone apps.

However, even with these core competencies, Chinese OEMs are not guaranteed an easy ride with rapid returns now that they are re-entering the European market. In their favor, most Chinese OEMs are action oriented and advocate „learning by doing“ and “agile” progression. But they must also adjust their mindset to complex European automotive markets that require rigorous and meticulous planning.  

Chinese OEMs should follow the example of the best European competitors and lay out a structured, holistic plan with detailed implementation processes that are based on European customer journeys. Furthermore, they should be prepared for long-term investments to gain and retain the trust of European customers in their products. This will require Chinese OEMs to establish a strong ecosystem in Europe that is adapted for short-term, medium-term and long-term strategies in all areas of their business, including pillar brands, product portfolios, pricing, distribution networks and the digital domain.

Short-term strategy: Brand building and competitive pricing

These are the critical next steps toward success in Europe. Chinese OEMs must ensure that their models are more attractively priced than mainstream European competitors to make up for their lack of brand reputation. Competitive pricing can yield some instant wins when combined with large-scale PR and communications campaigns for models that are extremely good value for money compared with similar vehicles made by competitors. Communications should focus specifically on performance marketing in line with the brand’s positioning during the individual journeys of potential customers, rather than adopting a broader “fishnet” approach through TV spots, billboard advertisements and other media channels.

Medium-term strategy: Product portfolio and network

It is very important for Chinese OEMs to choose a suitable product portfolio and an appropriate sales and aftersales network to gain entry to European markets, following thorough homework on individual market trends and tastes. In this context, it is worth noting that Chinese customers are not necessarily the same as their counterparts in Europe. To give one obvious example, while the SUV is the most popular model of vehicle in China, this is not universally true across European markets.

With regard to sales and aftersales networks, we generally see three distribution channels for China’s EV manufacturers to enter Europe. Firstly, they can cooperate with large local dealers who are interested in selling their vehicles. We believe that a large majority of dealers will be willing to work with Chinese OEMs, given the current trend toward the agent model, which is increasing the margin pressure on most dealers.  

Alternatively, Chinese OEMs can follow Tesla’s example and try to set up their own networks in Europe. This might seem the most desirable route in terms of retail steering and customer experience control. However, doubts remain about whether Chinese OEMs have the financial strength to set up a suitably extensive European network, especially if they are start-ups. Given their lack of capital, we believe it is more likely that Chinese players will adopt a combination of direct sales and franchise dealerships.

Lastly, Chinese OEMs should consider working with local mobility providers, whether they are rental, carsharing or subscription players, to get their vehicles visibly onto European streets, where they can generate word of mouth endorsements most effectively. Chinese players should focus in particular on the subscription model, where shorter contract periods and lower monthly fees can help overcome the resistance of European customers to Chinese cars.  

Long-term strategy: Creating a sustainable, positive brand reputation

A functioning ecosystem with clear structures and the right priorities are key challenges, but are still merely prerequisites for a successful market entry in Europe. Creating long-lasting brand recognition and growth for Chinese EVs will take both time and a willingness to experiment.

The leading Chinese EV manufacturer NIO is a good example. To its credit, NIO has invested a lot of effort in its ecosystem set-up in Europe, especially around user communities, user experience and other fields that are “beyond the vehicle.” Using Norway as its main testing ground, NIO aims to build an ecosystem with cars at its core that also includes digital services and lifestyle offerings, such as community building events. Yet NIO still only sold around 200 cars in Europe in 2021, despite all these innovations. Further refinement and analysis of its fledgling ecosystem will be required to establish how or even whether these services can meet the demands of European customers.  

Some observers, especially on the Chinese side, argue that such a detailed and rigorous approach is not necessary because there is one hi-tech product – the mobile phone – where Chinese manufacturers have already proved that they can make a rapid, successful market entry in Europe. A few years ago, Chinese mobile phones were almost unknown in Europe, but today the market is full of Chinese brands such as Huawei, Xiaomi and Oppo.

 

However, there are three significant differences between mobile phones and cars. Firstly, unlike cars, mobile phones can be changed frequently at a relatively low price. Secondly, the success of Chinese phones in Europe is based on the budget segment and is concentrated in a few countries. Consider the example of Xiaomi. In the second quarter of 2021, Xiaomi shipped 12.7 million units to Europe, making it the region’s single largest mobile phone supplier, ahead of Samsung (12 million) and Apple (9.6 million). Yet Xiaomi’s success is driven mainly by sales in Russia and the rest of the Commonwealth of Independent States (CIS), whose huge mobile phone market is dominated by budget buyers. This fact largely explains why the average price of a Xiaomi phone in Europe was around $164, compared with $250 for a Samsung phone and $808 for an Apple one. 

Thirdly, 50 percent of mobile phones in Europe are sold through network operators such as Vodafone and Telefónica, which also like to tweak the pricing of hardware devices with special offers and promotions. In summary, one should not assume from the success of Chinese mobile phone players in Europe that it is easily replicable in the auto sector.

There are no short cuts to a successful market entry

The bottom line is that it will be a painstaking and long journey for Chinese OEMs to make their European market entry a success at the second attempt, focusing on EVs. There are no shortcuts.

Yet we believe that they have everything at their disposal this time to avoid a repeat of their earlier failure. Today’s leading Chinese carmakers have a competitive product portfolio, a state-of-the-art technology stack, a customer-centric mindset and deep investor pockets. But as a Chinese proverb rightfully states, “you can’t clap with one hand” (一个巴掌拍不响). It will require a joint effort to make the re-entry of Chinese OEMs into Europe sustainable and profitable, because their success will depend on teaming up with the right local partners. 

Stay tuned for the next article in this series, where we explain:

  • Why Chinese OEMs still need strong partners to achieve lasting success in European markets
  • How these partnerships are faring so far for both sides
  • What needs to be done to make these collaborations more fruitful
Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Willy Wang

Willy Lu Wang (1981) joined Berylls Strategy Advisors in 2017. He started his career participating in the graduate program of Audi focusing on production planning. After stations at another strategy consultancy as well as being the strategy director for a German Tier-1 supplier, he is now responsible for the China business at Berylls.

He has a broad consulting focus working for all clients in China, whether they are JVs, WOFEs or pure local players. He is also responsible for the development of AI and Big Data products dedicated towards the Chinese market further strengthening the Berylls End-to-End strategy and product development capabilities.

Wang studied Electronics & Information Technology with focus on Systems and Software Engineering and Control Theory at Karlsruhe Institute of Technology.

Hongtao Wei

Hongtao Wei (1988), Associate Partner, joined Berylls Strategy Advisors in 2015, an international strategy consultancy specializing in the automotive industry, where he focuses on all issues related to the Chinese automotive market. In addition to Western manufacturers in China, his clients also include Chinese OEMs, investors, provincial governments, and state-owned enterprises.

He has profound expert knowledge in the areas of sales and aftersales. His other areas of expertise include digitalization, connectivity, and turnaround management.

He studied Sinology, Economics and Statistics at the Ludwig-Maximilians-Universität in Munich.

Soleiman Mansouri

Soleiman joined the Berylls Group in March 2022. He has set his focus on customer-centrist solutions, gaining experience in Product- and Corporate Strategy, Consulting with the focus on the OEM business. His Automotive career started with digitalization of the Aftersales of an US OEM in Europe and took him to China to the leading German OEM group, heading the Product and Portfolio department. He gained intensive consulting experience with one of the top management consulting firms and as a freelance consultant. Before joining Berylls, he was the Director Go-to-Market of one of the top Chinese OEMs supporting their entrance into the EU market. Soleiman is a graduated M.A./MBA in International Business from the University of Hamburg and ECUST/Shanghai.

Soleiman joined the Berylls Group in March 2022 and is part of the Asia-team, responsible for supporting all players in a successful market entrance. Also, provides profound expertise of customer-centric Product Marketing and Portfolio Strategy approaches to our clients.

Soleiman is expert in customer-centric Product-/Portfolio Strategy, Go-To-Market, Corporate Strategy and Entrepreneurship.

Global Truck Players: Q2 2022 Review

Munich, August 2022

Featured Insights

Global Truck Players: Q2 2022 Review

Munich, August 2022
T

he global truck players Daimler, Traton, Paccar and Volvo are regularly monitored by Berylls commercial vehicle expert Steffen Stumpp.

Here are his major findings for Q2 2022:

  • Highest quarterly profit ever
    The big 4 truck manufacturers have earned cumulated 2.9 bn Euro in Q2 2022 – more than ever before. Main drivers were significant price increases, a positive product mix development as well as favorable exchange rate effects.
  • Supply side remains key to success
    Bottlenecks on the supply side, caused by the Ukraine war and the COVID lockdown in China, limit production volumes and unit sales. There are significant differences in how truck OEMs cope with the current situation.
  • Book-to-bill ratio below 1.0
    For the first time since Q2 2020 the incoming orders were below deliveries, meaning that the truck industry will probably lose pace next year – there are first signs for an economic slowdown.

Can’t wait to read more? Download the Insight now!

Berylls Insight
Global Truck Players: Q2 2022 Review
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Authors
Steffen Stumpp

Associate Partner

Andreas Oesinghaus

Associate

Steffen Stumpp

Steffen Stumpp (1970) joined the Berylls Group in October 2020 as Head of Business Unit Commercial Vehicles. At this point, he already looked back on extensive professional and leadership experience in the commercial vehicle industry. Stumpp started his career in an OEM and went through different roles in research, marketing, product planning and after-sales service. When he switched to the automotive supplier industry, he took over the responsibility for worldwide sales and marketing of a medium-sized tier 1 supplier. After another step as head of sales he decided to join Berylls, where he is now responsible for the commercial vehicle business.

Stumpp is a graduate engineer and has studied industrial engineering at the KIT in Karlsruhe and the Technical University of Berlin with focus on logistics.