European consumer acceptance of Chinese cars is rising, but localized dealerships and residual-value management remain the key to breaking through

Overview

This report is Bernstein’s webinar note on whether Europeans are ready to accept Chinese cars, with Georg Mrusek, a partner at Horváth & Partner, as the speaker. It draws on his survey of more than 4,400 consumers and his consulting experience with Chinese OEMs, with core focus on opportunities, consumer acceptance, brand awareness, purchase drivers, barriers, and local channel requirements for Chinese brands’ rapid expansion in Europe.

Core views

The key conclusion is that European consumer acceptance of Chinese cars is improving materially, but this does not mean Chinese brands already have frictionless expansion capability. On the demand side, the share willing to consider Chinese cars rose to 55%, while the share rejecting them fell from 46% two years ago to 21%; by country, Spain and Hungary are the most open, while Austria and Sweden show higher resistance. On the brand side, BYD has built a clear awareness lead, and Xiaomi has a strong awareness base supported by its consumer electronics ecosystem. On the commercial side, Chinese OEMs still need to solve residual-value management, dealer confidence, after-sales networks, localized contracts, and fleet-customer structure issues. For European OEMs, the survey also offers some hope: consumers do not broadly view Chinese cars as clearly superior in technology or quality, and European manufacturers can still defend their mid-term position through brand strength, channels, after-sales support, and the launch of more affordable EVs in 2026-2027.

Analysis framework

The report uses a webinar-minute format, combining consumer survey results, brand awareness data, purchase drivers and blockers, dealer and residual-value management experience, and investment implications across companies. The analysis focus is not on a single company profit model, but on evaluating Chinese OEM expansion readiness in Europe across four dimensions: demand-side acceptance, brand funnel, channel execution, and competitive landscape.

Methodology notes

• Consumer surveyEuropean consumer purchase-intention survey

  Over 4,400 consumer respondents

  The report cites Horváth & Partner’s latest survey tracking whether European consumers are willing to consider buying Chinese cars, country-level openness, purchase drivers, and key concerns.

• Brand analysisBrand awareness comparison

  Differences in awareness of Chinese automakers in Europe

  By comparing awareness differences among BYD, Xiaomi, Polestar, MG, and other Chinese brands, the report assesses first-mover advantages and long-tail pressure when entering Europe.

• Channels and residual valueEuropean dealer localization framework

  Residual value management, dealer confidence, and after-sales network

  The report emphasizes that Chinese OEMs cannot simply copy China-market contract models and must adapt to European dealer commercial practices, integrate with existing systems, and offer commercially attractive terms.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BYD

  Chinese OEM; clear leader in European brand awareness; beneficiary of overseas EV expansion

  Strengths

  High brand awareness, clear price and value advantage, and relatively high residual margin potential in overseas EV sales.

  Weaknesses

  Still needs to improve dealer presence, after-sales support, and residual-value management capability in Europe.

  Comparison

  Compared with most Chinese brands, BYD has a clear lead in European consumer awareness.

  Risks

  European tariffs, minimum import price policies, residual-value pressure, quality trust concerns, and data security issues.

• Geely

  Chinese OEM; beneficiary of export scale and HEV strategy

  Strengths

  Expanding from a lower export base and accelerating its HEV product strategy.

  Weaknesses

  European consumer awareness and channel foundation still need continued build-out.

  Comparison

  The report highlights Geely as one of the better Chinese auto beneficiaries alongside BYD.

  Risks

  Intensifying European competition, execution risk in localization channels, residual value, and insufficient brand awareness.

• Xiaomi

  Potential European EV entrant; Bernstein rating is Outperform

  Strengths

  Has 39% European consumer awareness despite not yet selling EVs, and its consumer electronics ecosystem supports brand introduction.

  Weaknesses

  European EV sales have not started, and automotive channels, after-sales, and residual-value systems still need validation.

  Comparison

  Awareness is higher than most Chinese car brands that have not entered Europe deeply.

  Risks

  Execution risk in European expansion in 2027, regulatory, and data-security trust issues.

• XPeng, Li Auto, NIO

  Chinese EV companies; Bernstein rating is Market-Perform

  Strengths

  Have a foundation of EV technology and product awareness, and could benefit from rising European acceptance of Chinese EVs.

  Weaknesses

  Brand awareness, channel scale, profitability, and localization in Europe remain constrained.

  Comparison

  The report rates them more neutrally than Xiaomi’s Outperform stance.

  Risks

  Price competition, demand volatility, channel costs, policy, and residual-value risks.

• Traditional European OEMs

  The main competitors as Chinese cars enter Europe

  Strengths

  Have mature brands, dealer networks, after-sales service, and customer trust, and will launch more affordable EVs in 2026-2027.

  Weaknesses

  BEV pricing remains a consumer purchase barrier; software and ADAS iteration speed needs to improve.

  Comparison

  Chinese brands are more attractive on price and value, but European OEMs remain stronger in channels and service trust.

  Risks

  If low-priced EV rollouts underperform or software capability falls behind, they may lose more share to Chinese brands.

Key data

• Share of European consumers willing to consider buying a Chinese car55%Data as of Dec. 2025; it was 43% in Oct. 2023.
• Share explicitly stating they would buy a Chinese car13%It was 6% two years ago, now more than double.
• Share explicitly not considering Chinese cars21%It was 46% two years ago; resistance has clearly declined.
• BYD brand awareness among European consumers52%Far above most Chinese brands.
• Xiaomi brand awareness among European consumers39%Although no EVs have been sold in Europe yet, awareness is supported by smartphone, IoT, and home appliance businesses.
• Concerns about the quality of Chinese cars44%Data from H2 2025; it was 51% in H1 2024, but quality remains a major barrier.
• Concerns about lack of after-sales support19%Below 24% in H2 2023 and 28% in H1 2024.
• Concerns about lack of sales outlets13%Down from 19% in H2 2023.
• Openness in Spain and Hungary75%Countries most willing to consider Chinese cars in the survey.
• Leapmotor Europe sales1,262 units in 2024; 33,567 units in 2025The report attributes this growth to access to Stellantis’s existing dealership system.

Impact & implications

From an investment perspective, Chinese EV and hybrid-exposure OEMs with stronger overseas operational footing are more likely to benefit from higher European acceptance and a high oil-price environment. BYD benefits from affordable models and higher margins in overseas EVs; Geely can scale from a lower export base while pushing HEV strategy; Xiaomi has brand awareness and expansion potential in Europe. But if Chinese brands do not improve residual value, after-sales service, channel partnerships, and local commercial terms, demand release may remain constrained. European OEMs face pricing pressure, but can still rely on brand, channels, service trust, and low-priced EV products in 2026-2027 to sustain mid-term advantage.

Risks

• Chinese brand residual-value management lags behind Europe and other Asian peers, potentially weakening dealer confidence and brand economics.
• Quality remains one of the main reasons European consumers do not consider Chinese cars, even though that concern has eased.
• Advanced driving and connectivity features have not strongly resonated with European consumers, partly due to trust and data security concerns.
• After-sales networks and sales networks have improved but remain areas of concern for consumers and fleet customers.
• European tariffs, potential minimum import pricing, and other regulatory policies could affect the competitiveness of imported Chinese models.
• Overreliance on leasing customers may depress residual values and damage long-term brand economics.

What to watch

• The launch cadence and pricing of low-priced EVs by European OEMs in 2026-2027.
• Progress in BYD, Xiaomi, Geely, and other Chinese brands’ localization in Europe across dealer networks, after-sales, and residual-value management.
• How European consumer trust evolves regarding Chinese car quality, data security, and advanced driving functions.
• Whether high-openness markets like Spain and Hungary translate into actual sales growth.
• Changes in EU tariffs, minimum import prices, or other trade policies.
• The penetration of Chinese OEMs in 2B corporate fleet customers and whether they avoid overexposure to leasing channels.