China bursts into the European market with affordable cars: will Renault’s response be to return to its roots?
The European automotive landscape has undergone a significant transformation with the entry of Chinese cars offering affordable prices and an appealing electric offer. These vehicles have begun to capture a considerable share of the market, challenging traditional brands on the continent. In response to this incursion, Renault, one of the historic giants of the European automotive industry, is considering adapting its strategies by going back to its roots. The company aims to launch more economical models through its electric subsidiary, Ampere, including the Renault Legend, as part of an effort to compete with the more accessible and sustainable options coming from Asia.
China bursts into the European market with affordable cars
China has aggressively positioned itself in the European car market, offering affordable cars that have quickly captured a significant market share. While European manufacturers are seeking ways to compete, Renault is considering returning to its roots with more economical models. This article explores China’s strategies and how Renault could respond to remain relevant in an increasingly competitive market.
The advancement of Chinese cars in Europe
In 2024, nearly 750,000 cars from Chinese origin entered the European market, capturing 17.2% of market share in terms of value. This growing presence is a clear sign that Chinese manufacturers see significant potential in Europe for their affordable and technological models. Several Chinese brands have been expanding their presence, focusing mainly on electric and hybrid vehicles that offer consumers great innovations at competitive prices.
Renault’s pricing strategy
To compete with this massive influx of Chinese cars, many European brands, including Renault, are rethinking their pricing strategy. Renault has announced the development of an affordable urban model, the Renault Legend, which will be launched in 2026 through its electric subsidiary, Ampere. This move aims to attract consumers who are interested in electric cars but do not want to spend a fortune on their acquisition.
Currently, Renault sells the Renault 5 at a base price of 25,000 euros, which represents an effort to offer more accessible models without sacrificing quality, in response to the Chinese cars that are revolutionizing the European market with their competitive prices.
Taxes and tariffs: a barrier for China
The European Commission decided to impose higher tariffs on electric cars manufactured in China. These new taxes, which exceed the current rate of 10%, aim to level the playing field for local manufacturers. However, these measures have also been critical for some Western producers, such as Tesla, which imports from Shanghai.
China has warned that they may retaliate if the tariffs significantly harm their exports, making the long-term impact of these measures still to be directly seen. Javier San Martín, an expert on sustainable operations, mentions that there is a latent panic in these decisions, as China’s responses could be just as damaging or more than the competitive doping that is intended to be curbed.
The future of the European automotive market
European consumers still show some reservations regarding new cars, especially electric ones, due to high prices and doubts about charging infrastructure. However, China has managed to capture a share of the untapped market with affordable cars. The expectation in Europe is that, with strategic decisions such as those from Renault, the market can be rebalanced and reduce the current advantage that Chinese manufacturers possess.
Exploring the impact of the massive entry of Chinese cars into Europe, attention now turns to how brands like Renault will respond in the coming years, carefully weighing whether a return to their origins in the budget segment is the best way to remain relevant to European consumers.
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The impact of China’s entry into Europe and Renault’s strategy
China’s entry into the European market for electric cars has brought about a significant change in the dynamics of the industry. By offering affordable cars and advanced technology, Chinese brands have quickly captured a large part of the European market, especially in the electric vehicle segment. This phenomenon has put considerable pressure on European manufacturers, who have had to adapt to avoid losing market share.
Renault, a historic giant in the European automotive industry, has responded to this challenge by rethinking its strategy towards its economic roots. The French company has announced plans to launch more accessible electric vehicle models, such as the upcoming Renault Legend, which is expected to have a price below 20,000 euros. This move aims to match the competitive prices of Chinese cars without compromising the quality and design for which Renault is known.
Renault’s strategy not only addresses price competition but also seeks to capture the essence of the urban vehicles that once defined its brand. By returning to the origins of producing affordable and efficient cars, Renault aims to win the loyalty of old consumers and attract a new generation of buyers who value both cost and sustainability.
This response has not gone unnoticed. The push for affordable electric vehicles could change the competitive landscape in Europe, providing Renault with the opportunity to reaffirm its position in the market. However, the challenge remains to maintain quality and technology in line with contemporary customer expectations. The outcome of this strategic move by Renault could define the path of the European automotive industry in the coming years.
