![\"Nepali](\"https:\/\/www.europesays.com\/germany\/wp-content\/uploads\/2026\/08\/1786899222_631_0x0.jpg\")
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Aion Y EV. Guangzhou Automobile Group’s Aion is the latest Chinese brand to launch sales in Europe. (Photo by Subaas Shrestha\/NurPhoto via Getty Images)<\/p>\n
NurPhoto via Getty Images<\/p>\n
The good news for Europe\u2019s automakers is that home sales will rise a bit in 2026. The trouble is, sales by rivals from China will likely accelerate; result \u2013 falling market share, evaporating profits, closing factories, rising unemployment. And Germany, once the unassailable leader of the global auto industry, is in the crosshairs. <\/p>\n
According to GlobalData<\/a>, sales in Western Europe \u2013 that includes the big five markets of Germany, France, Britain, Italy and Spain \u2013 will grow just 1.6% in 2026 to nearly 12 million, boosted by strong electric vehicle sales, many of which will come from brands in China. <\/p>\n These sales will be led by the likes of BYD, SAIC\u2019s MG, and Chery\u2019s Jaecoo and Omoda. New names will be appear including Stellantis affiliate Leapmotor, the Geely powerhouse which now includes its own name vehicles plus its subsidiaries Polestar and Volvo. Chery is launching its own brand, plus smaller electric vehicles badged Tiggo. Guangzhou Automobile Group<\/a>\u2019s Aion is cranking up sales in Britain and on to mainland Europe. And in case the German premium manufacturers think they can breathe a sigh of relief for not being exposed to the mass market, Chinese upmarket names like Xpeng, Zeekr, NIO and Ziaomi have other ideas to upset Porsche, Mercedes, BMW and Audi. China and upmarket vehicles is no longer an oxymoron.<\/p>\n Chinese compact SUV the Chery Tiggo 4, is another Chinese sub-brand currently launching in Europe. <\/p>\n getty<\/p>\n Fitch Ratings expects sales of 13 million vehicles in all of Europe in 2026. BMI now predicts a 1% decline after initially seeing a 2.6% rise. But the most important number is perhaps the 3 million annual sales that have disappeared since the Covid pandemic struck. <\/p>\n Devastating toll of China\u2019s incursion<\/p>\n The European industry is still geared up to service this bigger number, although job-loss plans at Volkswagen<\/a> \u2013 100,000, and 8,000 at BMW, 9,000 at Porsche, 13,000 at Bosch and 14,000 at ZF, already tell the story of the devastating toll of China\u2019s incursion, which is gathering pace. <\/p>\n Chinese autos now account for almost 10% of the European market. Global consultancy AlixPartners expects this to rise to 16% by 2030, and many consider this to be a seriously conservative estimate.<\/p>\n Investment bank UBS puts it this way.<\/p>\n \u201cThe global rise of Chinese (manufacturers) remains the top challenge for European manufacturers and suppliers in 2026<\/a>. After BMW, we expect more risk of profit warnings from German manufacturers on restructuring charges. We also see downside risk to underlying performance of mass manufacturers,\u201d UBS said in a report.<\/p>\n Professor Stefan Bratzel\u2019s Center of Automotive Management<\/a> said in the first seven months of 2026, the EV market in Germany was booming and sales for the whole year could rise to 850,000, boosted by an increasing number of attractive new models, government subsidies and high gasoline prices.<\/p>\n New more affordable EVs include the Renault 4 and 5 E-Tech, the Citro\u00ebn \u00eb-C3, VW\u2019s \u0160koda Epiq, and the Fiat Grande Panda. Citroen and Fiat are Stellantis brands. <\/p>\n But the Chinese manufacturers are winning more market share. <\/p>\n German EV brands fell from 63.5% to 54.2% <\/p>\n “German group brands still dominate the domestic EV market, but their combined market share fell noticeably from 63.5% to 54.2% in the first half of 2026 compared with the prior-year period. Tesla, the Stellantis brands, and Chinese manufacturers have been able to meaningfully increase their market shares in battery-electric registrations, with market leader Volkswagen losing out the most,\u201d Bratzel said in the report.<\/p>\n ZEEKR will soon be challenging German upmarket brands in Europe.(Photo credit CFOTO\/Future Publishing via Getty Images)<\/p>\n CFOTO\/Future Publishing via Getty Images<\/p>\n \u201cBut even across all drivetrains, Chinese manufacturers are among the biggest market winners over the first seven months, while German and Japanese manufacturers are losing market share: BYD, for instance, has overtaken Volvo in new (sales) in Germany for the first time. Electromobility and Chinese newcomers will permanently reshape the balance of power in the German market,\u201d according to Bratzel. <\/p>\n The European Union needs to step in and help Europeans handle competition, said by some Europeans to be unfair.<\/p>\n \u201cSubsidy policies and regulations need to be adjusted accordingly, so that value creation takes place predominantly in Europe and unfair business practices are avoided,” he said. <\/p>\n \u201cFirst step – restore cost competitiveness\u201d<\/p>\n