Berylls Survey: Acceptance of Chinese Premium Brands Rises Sharply

The China experts from Berylls Strategy Advisors, led by Soleiman Mansouri, have discovered through a survey conducted with the opinion research institute Civey a rising acceptance of Chinese premium OEMs and their BEV models among German customers. The representative survey was conducted among German car buyers who are considered the most loyal, namely drivers of Audi, BMW, and Mercedes models.

The analysis showed that Aiways, BYD, Nio, Polestar, and others definitely have a chance of success. This is remarkable, as most Chinese manufacturers have not yet started their marketing/communications activities. Therefore, the awareness of the brands and their models is still at a relatively low level. An exception is Polestar. The Volvo offshoot has been heavily present in the German market with advertising and media appearances since 2018.

Key Deal: Sixt Buys from BYD

Customers who have already experienced a Chinese vehicle are significantly more open to making another purchase. Apparently, they have not been disappointed by their previous model from China, the purchase process, or the service around their car and are willing to give newcomers a second chance. In this context, the deal announced between BYD and SIXT, which will provide a large number of customers with the opportunity to experience Chinese products first-hand, is of enormous importance, according to analysts' forecasts. Overall, the market for electric cars will become significantly more dense with the Chinese market participants, thanks to such cooperations.

"The battle for the attention of first-time buyers is real. Especially German premium manufacturers know how important it is to win over the age group of 30- to 39-year-olds, the so-called Generation Y, as first-time customers," explains Soleiman Mansouri, Associate Partner at Berylls Strategy Advisors. 

Typically, German buyers decide to purchase a premium model for the first time at around the age of 40. And it is precisely among this age cohort that reservations about Chinese vehicles are particularly low.

Beware: Price-Performance Must Match

However, the demands of Chinese OEMs could turn out to be a major stumbling block, the analysts note. The survey conducted together with Parwiz Torgull, head of Civey's Customer Success Team, shows how important a good price-performance ratio is to German customers. For almost every second survey participant, price is the number one purchase criterion. Technical features such as long range or charging times follow far behind. Features that are highly favored by buyers in China, such as digital functions, play a very subordinate role for the majority of German buyers.

Range and Design Also Important

Customers who already have experience with Chinese cars cite different reasons for their purchase decision. For them, range is very important, and design also plays a significant role. However, price remains a decisive criterion for them when acquiring another car from China. At this point, German customers currently see the Chinese as superior to the German OEMs, while they barely notice any technical differences.

Not Too Expensive, Otherwise It Gets Difficult

The study suggests that manufacturers who price their products on par with or close to the German competition will struggle to succeed in the German market, according to the Beryll analysts. It is also problematic that the models from China differ too little from one another. There are hardly any brand differentiation points, neither technical nor even in design. The Chinese models lack the special features that customers seeking a premium price are looking for, the authors continue.

Unrealistic: The German E-Car Market Grows Slowly

Nevertheless, BYD head Shu aims to sell 120,000 of his models in Germany by 2026, as he announced on the sidelines of a dealer conference. Other manufacturers are entering the German market with similarly ambitious goals. Although the survey shows they are meeting customers willing to give them a chance, it is unrealistic that this will result in such a large number in a short time, especially if the offering consists exclusively of electric cars. The German BEV market is still too small and growing too slowly to meet the ambitious goals of the Chinese providers, argue the Beryll experts. Newcomers will therefore have to settle for smaller portions of the market pie. However, the seats at the coffee table are set, concludes the analysis.