Made-in-Asia cars threaten to squeeze Europe market

As growth in the European auto market levels off and a global economic slowdown looms, Europe’s carmakers face a fresh fight from cheaper Asian...

As growth in the European auto market levels off and a global economic slowdown looms, Europe’s carmakers face a fresh fight from cheaper Asian rivals including new names set to boost exports to the continent.

This week’s Geneva auto show is introducing some of the brand names that might be familiar sights on the streets of London and Paris in coming years, makes such as China’s Brilliance Auto and BYD Auto.

Tata Motors also hopes to eventually crack the European market, Tata Group chairman Ratan Tata said. India, China and South Korea all have brands set to step up the battle in Europe against makers such as Volkswagen and Renault.

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Profit margins are already low in Europe due to the popularity of small cars and diverse tastes, but automakers looking to grow through exports to emerging markets now face increasing traffic coming the other way as plants in India, China and elsewhere step up production headed for Europe.

“It has been nice in a way because Western carmakers have been going into emerging markets for their growth,” Philippe Houchois, auto analyst at JP Morgan said. “Eventually carmakers in emerging markets will come to the West to return the favour.”

Western firms have helped develop auto markets in countries such as China where Brilliance Auto, for example, partners with BMW AG.

The Chinese company now has its sights set on Europe and expects to have distributors covering the main European markets by the end of this year selling its lower-priced saloons.

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It aims to compete mainly with South Korea’s Hyundai Motor Co but also with some Japanese and French brands, Hans-Ulrich Sachs, CEO of Brilliance importer HSO Motors Europe, said.