China's innovative edge jeopardizes Europe's market position
Auto Shanghai 2025 has provided a clear indication of this trend. China has evolved from a market that merely followed global trends to a driver of innovation in the global automotive industry. It is evident that leading Chinese electric vehicle manufacturers, namely BYD, XPeng and NIO, are showcasing their technological prowess through a range of impressive features, including rapid charging capabilities, AI-controlled interfaces, and remarkably expedited development cycles. These developments underscore the significant technological lag that Europe is experiencing in the automotive sector. German manufacturers have been particularly affected, given that China is not merely a sales market – it has long since become an innovation ecosystem. The disparity in the number of new vehicle models presented at the trade fair is striking; Chinese OEMs showcased over 50 models, while German manufacturers presented a mere 15 (Zecar.com 2025).
Pressure to adapt due to “China Speed” is growing rapidly
European companies face considerable challenges not only from the innovative strength of Chinese OEMs, but also from the rapid pace of development exhibited by these entities. In this particular context, development cycles of less than 24 months are considered standard. However, it should be noted that German original equipment manufacturers (OEMs) require almost twice as long to complete their respective development cycles. This is due to the fact that machine manufacturers are losing orders to Chinese suppliers who deliver faster and integrate software-supported systems more cheaply. Suppliers are also experiencing mounting pressure as Chinese Tier 1s, such as CATL or Huawei Automotive, are achieving significant market share and expanding their operations on a global scale. The notion of "China Speed" is not merely a rhetorical device; it signifies a novel paradigm within the automotive and mechanical engineering sectors (Roland Berger, 2025).
Massive consequences for OEMs, suppliers and machine manufacturers
Recent market analysis indicates a decline in the market share of German original equipment manufacturers (OEMs) in China from 25% in 2019 to approximately 18% in 2024. This decline is concurrent with an increase in the market share of Chinese brands, which has grown to over 60%. This development has implications for vehicle manufacturers, suppliers and machine builders. It is imperative for the latter to reconsider their conceptual frameworks, as software-based components are progressively displacing conventional mechanical solutions. The necessity for localization, digital control and rapid implementation is establishing novel standards that many European suppliers are currently unable to meet. Those unwilling to embrace change may find themselves lagging behind, both technologically and economically (Allianz Economic Research 2025).
How IMIG makes companies fit to compete in China
In response to this demand for transformation, IMIG has devised a comprehensive consulting and implementation strategy. IMIG develops bespoke localization strategies for Original Equipment Manufacturers (OEMs), suppliers and mechanical engineering companies. The company also supports the development of local production capacities and implements agile methods to shorten development cycles. It is imperative to note that particular emphasis is placed on the integration of software and ADAS components, the development of digitally controlled production systems, and the strategic optimisation of supply chains. For mechanical engineering companies, IMIG provides project management support for the design and implementation of automated manufacturing solutions that guarantee the necessary process stability even in highly dynamic markets. With experienced local teams, in-depth industry knowledge and practical implementation, IMIG enables companies to successfully master the transition to "China Speed".
Take action now: Understanding China as a driver of innovation
Auto Shanghai was not merely a trade fair; it was a clarion call. It is evident that companies which continue to perceive China exclusively in terms of its role as a sales market are miscalculating the dynamics of change. The present moment is optimal for the implementation of strategic investment, the adaptation of novel technologies, and the establishment of local partnerships. IMIG is the implementation partner that not only analyses, but also implements changes. In collaboration with IMIG, European companies are able not only to maintain their competitive position, but also to contribute to the shaping of change.
Act now – before pressure turns into risk.
Let’s analyze together how your company can increase its resilience to global trade disruptions. Contact us for individual advice:
