All talk with little to show: There is no invasion of Chinese brands into Europe, Toyota is the real threat, now Europe's No. 2

The discourse regarding the Europe Union’s increased tariff on China-made battery EVs (up to 45.3%) is centered on how subsidized, low-cost Chinese battery EVs (BEVs) pose a threat to Europe’s manufacturing base.

VW’s proposed closure of up to three automotive plants in Germany has also been juxtaposed against the threat of lower-cost Chinese BEV models.

But sales data compiled by the Germany-based Schmidt Automotive Research suggests that the threat to the VW Group, Stellantis, and Renault – Europe’s biggest employers in the automotive sector – is not BYD, but Toyota.

Between January and September 2024, BYD managed to deliver just 28,535 cars, or 0.3% of the combined market size of Western Europe’s 18 countries tracked by Schmidt.

Far from posing a threat to European carmakers, the so-called Chinese invasion is going into reverse. Geely’s Polestar and Smart declined 23% and 2% respectively in the same nine-month period, while Lynk & Co fell by a shocking 75%.

Nio declined by 24%.

GWM is shutting down its European headquarters in Germany. It sold 23% fewer cars this year than last year, managing to move just 3,369 units in the region.

The No. 1 selling Chinese brand in Europe is still SAIC’s MG, managing 165,311 units, up 6% from last year. MG is also the leading Chinese BEV brand in the region but overall, less than half of Chinese cars sold in Europe are BEVs.

The real threat to the VW Group, Stellantis, and Renault is not BYD, but Toyota.

Toyota has been quietly strengthening its position in Europe with its wide range of hybrid models, which are seeing much stronger demand than BEVs.

Like a true battle-hardened, experienced manufacturer that it is, Toyota is choosing to keep quiet, hiding behind the firing lines so the focus of Europe’s unproductive debates is centered on Chinese brands and BEVs, before coming up from the rear to sell its easy-to-understand and practical hybrids to a public confused with the many new brands being launched.

Schmidt noted that Toyota has since overtaken Stellantis and Renault to become the second biggest selling car marque in Western Europe’s 18 biggest markets.

This year alone, Toyota (including Lexus) grew 10.1% in Spain, 14.4% in France, 16.4% in Germany, and 21.9% in Italy. Double-digit growth is typically only seen in new brands starting from scratch (thanks to low base effect), not mature manufacturers like Toyota.

VW is Europe’s biggest carmaker, but it has since fallen behind Toyota in 13 out of the 18 biggest markets in Western Europe. Schmidt noted that VW is overly reliant on Germany, with its domestic market contributing 43.5% of the region’s sales, and if Germany’s numbers are removed, Toyota would be separated from VW by less than one percentage point.

The news headlines will imply that the threat to European car makers is China’s BYD, but cold hard numbers will show that Japan’s Toyota is the one they should be worried about.