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Last week, I shared my thoughts on the Paris Motor Show, and judging by the latest trade announcement (see the Reuters quote below), it seems the EU has drawn the same conclusions I did. Despite potential tariffs, European vehicle manufacturers struggle to compete with Chinese OEMs on price and features.
Quote from Reuters:
“The two sides are looking at possible minimum price commitments from Chinese producers or investments in Europe as an alternative to tariffs.”
Introducing tariffs might delay Chinese dominance temporarily, but it won’t solve the underlying issue. Instead, it risks increasing vehicle costs and shifting the problem to consumers. This could erode trust in OEM brands. Raising prices for advanced, technology-driven cars may alienate the public and cast doubt on the technological leadership of European brands. This is critical for consumer confidence – at the end of the day, it’s the customer who buys the car.
The real issue, the “elephant in the room,” is Europe’s ability to leverage skills, technology, and supply chain synergies to remain competitive.
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Original Post: 21 April 2024
The Tiro team ventured beyond our usual technical and engineering trade shows to attend the Paris Motor Show. It was an opportunity to delve into new technology, electrification, and the future of car design architecture. To minimise disruption at Tiro Towers, we took the first train out and the last train back via Eurostar on Saturday. (Not something we’d recommend – it made for a very long day!)
As it was my first visit to the Paris Motor Show, I didn’t have any preconceived notions. Unlike the technical engineering shows we usually attend, the Paris show is more of a public spectacle – a family day out showcasing shiny new cars, rather than a hub of engineering insight. However, given Tiro’s focus on motorsport and high-performance engineering recruitment, I thought it was time to explore what the major vehicle manufacturers and their suppliers are up to.
What Did I Learn?
The Chinese manufacturers are not just on their way – they are here, setting the benchmark.
The show’s central theme was affordable EVs, with Chinese manufacturers showcasing larger luxury sedans and SUVs. Meanwhile, European carmakers presented a mix of small, urban two-seaters, mid-range sedans, and traditional SUVs.
A clear message emerged from the Chinese carmakers:
“We can deliver a feature-packed, spacious vehicle at half the price of an average European car.”
They’ve mastered the software-defined automotive future, coupled with a profit-driven Tier 1 and OEM manufacturing approach. This is underpinned by a state-backed, uniform drive in Tier 1 technology, battery production, electronics, software, domain architecture, and manufacturing—all with the freedom of a blank-slate design process.
I must admit, I left the show feeling deflated by Europe’s response. Compared to the Chinese offerings, the European effort seemed lacklustre, almost as if I were witnessing an automotive version of Nokia vs. Apple – and it wasn’t looking good for one side.
Looking Ahead
I imagine there’s some serious soul-searching happening in the European automotive industry. While trade tariffs might temporarily slow the Chinese revolution, they won’t stop it. Chinese manufacturers seem to be saying:
“Even with a 50% tariff, we’ll remain competitive on price while delivering all the features and technology as standard, not expensive add-ons.”
Your Thoughts?
We’d love to hear from engineers working in the automotive industry:
- How do you think Europe can compete?
- Is this just my perception, or is it a real and pressing issue?
- If it is a problem, who bears the responsibility – car manufacturers, governments, or both?
- What engineering talent do European manufacturers need to bridge the gap?
Who We Are
Tiro is a specialist technical and engineering headhunter, supporting the global automotive industry in securing talent to address future challenges and drive transformation.
If you’re facing a technical challenge that demands business-critical talent, feel free to contact us.
