Munich Motor Show 2023: Chinese manufacturers at the rendezvous

The Munich Motor Show (IAA) is on the way to becoming a traditional meeting place for the German automotive industry. Inaugurated by German Chancellor Olaf Scholz, the second edition of the IAA comes in a difficult economic context marked by the war in Ukraine, the slowdown in Chinese growth and spectacular inflation in the euro zone.

Despite an increase in car sales within the European Union over the last twelve months, they remain more than 20% below their 2019 level, before the outbreak of the pandemic. The incumbent manufacturers are now facing formidable Chinese competition, jeopardizing their dominant position in the booming electric car market.

“Traditional” builders threatened on their own soil?

Of the IAA exhibitors, 41% are headquartered in China, and manufacturers such as BYD and Leapmotor may well steal the show from European giants like Volkswagen, BMW and Mercedes. Conversely, Tesla, which had been absent from major motor shows for ten years, is making a comeback to overshadow the biggest European brands. Matthias Schmidt, an independent industry analyst in Germany, explains that Tesla “Little by little aligns itself with the automotive sector, and the company that never did marketing begins to do so”.

German manufacturers, long proud of their national car industry, are facing a situation of growing fragility, but they will try to convince visitors by promoting their electric models to counter Asian competition.

Faced with the decline in purchasing power due to inflation, the demand for “affordable” electric models is on the rise. Mercedes will take advantage of the show to unveil an electric car concept prefiguring the future electric CLA, while BMW will give more details on its new range of vehicles based on the future “Neue Klasse” electric architecture, scheduled for 2025.

An already contested show

In addition to the economic stakes, the ecological aspect is a stated priority of the show, but also arouses criticism. While automotive groups are posting strong profits thanks to rising prices, several environmental groups have announced “actions of civil disobedience” to disrupt the IAA.

And “camp for the mobility revolution” will accommodate approximately 1,500 people in a park on the outskirts of Munich. Environmentalists accuse automakers of “destroying the lives of countless people around the world” with their unbridled growth. Demonstrations had already disrupted the previous edition of the show.

The Munich Motor Show expects a total of around 700,000 visitors, compared to 410,000 in 2021, divided between the paying convention center and the city center where free entertainment around cars, but also bicycles, will be offered. Rebranded as IAA Mobility in 2021, when the traditional auto show moved from Frankfurt to Munich, organizers are highlighting the “mobility, sustainability and technology” rather than the car.

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