China and Europe turn their backs on the US at the Shanghai Motor Show

Seen from the sky, the National Exhibition and Convention Center (NECC) resembles a four-leaf clover. A walk around its exterior would almost be enough to build a bus line of its own, and its interior houses eight double-height pavilions, a central plaza, and large galleries with dozens of restaurants that these days host a constant flow of visitors. Because it's also the venue for the Shanghai Auto Show, which is being held until May 2.

First held in 1985, this year marks its 21st edition, alternating with the Beijing fair, which is almost twice as large, with nearly 360,000 square meters of exhibition space. This is the equivalent of 45 first-division soccer fields, which translates into endless leg-pumping walks for journalists—13,000 in 2023, an all-time record— who come to this Chinese city to assess the health of the global automotive industry.

world's leading power

Today, that industry is plagued by the three-way trade war between the US, Europe, and China. But the grandeur and energy conveyed by the stands of the dozens of Chinese brands make it clear who's calling the shots, as if data such as the Asian giant's supremacy in electric cars or its global leadership in vehicle exports —5.9 million by 2024, which have awakened the monster of tariffs— and in the production and sales volumes (more than 32 million units), which it has led for 16 years, weren't enough.

You just have to look at the details. Some reflect economic power, such as Shanghai's magnificent nighttime skyline along the banks of the Huangpu River, the avenues lined with miles of trees and perfectly manicured plants, or the exquisitely executed infrastructure (be it the roads and their impressive flying interchanges or the high-speed trains).

Mercedes wink

We noticed other such details while we were fully immersed in the NECC. Some were subtle, such as the nod to Mercedes-Benz, with several screens hanging from the ceiling, where its star logo appeared embedded in a kind of flag on a red background.

And there are much more striking, not to say annoying, ones. We're referring to the recurrent presence of influencers and creators who arrive in noisy herds, cell phones in hand or with a cohort of photo and video cameras following their steps. Many of them arrive from all over the world—Latin America, especially—invited by the manufacturers themselves.

CONTRASTS

But while they are legion among Chinese brands posing in front of extravagant designs, featuring cars dressed up like comics or covered in something resembling wool, they shy away from the solemnity (or seriousness) of the spaces booked by foreign manufacturers. Basically, all the major German groups (Volkswagen, Mercedes-Benz, and BMW), several Japanese companies (from Honda to Toyota), and even North American companies (Buick, Ford, and Cadillac).

"We know our customers better in our local market and respond better to their needs and desires," summarized Li Xueyong, vice president of Chery, the company behind the Omoda and Jaecoo brands, which are sold only outside China and have entered Europe through Spain.

And those tastes extend to cars with very similar lines, designed by top designers hired on the basis of checkbooks. Or screens of all kinds, from those that take up the entire dashboard to those that can be moved from one side to the other. Furthermore, since they develop a new model in just 20 months (compared to the standard 48 or 60), they quickly adapt to changes in demand or introduce technological improvements, thanks also to the collaboration of giants like Huawei and CTAL. The latter, the world's leading battery producer , has presented a technology that allows 520 kilometers of autonomy to be recovered in five minutes. Finally, they are so confident that they are increasingly daring to venture into a territory that has always been off-limits to them: luxury cars.

Seven out of 10 cars

So if it used to be cool to own a European, Japanese, or American luxury car, today it's cool to own one from Nio, Xiaomi, Leap Motor, MG, BYD, Exceed, Zeekr, or Xpeng... or any of the new brands that are coming out of the hat. Like ICar, from Chery, the leading Chinese importer for over two decades, which offers a family of friendly electric or extended-range 4x4s (like the 'disguised' one shown in the main photo of this article) that would be a huge hit if they arrived in Europe. Added to all this is the patriotic fervor caused by the tariffs of up to 145% imposed by the US, while those set by the EU last October are now being replaced by fixed minimum prices for electric vehicles imported to the Old Continent.

In short: if in 2020 the local product share was barely 35%, today it's already at 68% and rising steadily. However, BYD is the best example of this revolution. Its president and founder, Wang Chuanfu, recalled that "in 2019" their only goal was "to survive," whereas they are already the world's third-largest manufacturer, the first in electric vehicles, and this year they aim to reach almost five million units sold.

Volkswagen, the former leader

Meanwhile, European and Japanese brands, also facing Trump's tariffs, are even more optimistic about the opportunities offered by the Asian giant. Lexus, Toyota's premium division, has announced plans to build a factory in the country, and Volkswagen has fully accelerated its "In China, for China" strategy, launched in 2024 (marking its 40th anniversary here) and with which it seeks to regain the leadership it held for decades and lost in 2023 to BYD.

To achieve this, they have no choice but to rely on partners like FAW or SAIC if they want to work "at Chinese speed." That is, adopting technologies—such as platforms—where those companies are more advanced. This strategy, taken to the extreme, was embodied in the E5 Sportback, the first model from Audi's joint venture with SAIC, which will only make electric models for wealthy young Chinese. The company, called AUDI (in capital letters and without the rings), is headed by Spaniard Fermín Soneira.

internal tensions

Although not all that glitters is gold. And much of this is due to pressure from the Chinese government itself. It's true that it was the Chinese authorities who initiated the shift toward electric cars 20 years ago, spurred by a letter sent to them by one of their citizens who had worked at Audi for several years. But their subsidy policy is also behind the $17.5 billion losses suffered by Chinese dealers in the first eight months of 2024, forced to implement an aggressive discount policy.

In this context, one of the arguments brands were using to differentiate themselves was to advertise the benefits of their vehicles' autonomous driving. But the State has just announced that it will closely monitor the use of these messages and the designation of "smart cars" after the fatal accident involving a Xiaomi model. It has also been revealed that it is considering possible mergers between the manufacturers it controls—Changan, FAW, and Dongfeng in particular—to accelerate their growth in the electric vehicle business and boost their export potential.

Spanish presence

The final point must be made about the Spanish presence in Shanghai, which was also present. On the corporate side, both Antolín and Gestamp unveiled their latest developments in the components they manufacture for more than a hundred clients around the world.

Meanwhile, on the association side, the dealer association Faconauto continues to strengthen the strategic alliance they sealed last year in Beijing with their Chinese counterparts at CADA, who are also interested in entering Spain directly. Not surprisingly, there are now 500 Spanish dealerships distributing models from manufacturers from that country.