The Chinese car revolution is moving faster than Europe expected

Five years ago, few mainstream Chinese brands had a meaningful presence in Ireland. Today, showrooms are crowded with names such as BYD, MG, Xpeng and Leapmotor. Several more are on the way.

Leapmotor Ireland brand manager Stephen McGrath reckons what has caught European rivals off guard is the sheer pace of innovation and development at the Chinese car companies.

He sees the key differences between Chinese and European carmakers “are ultimately the speed of getting the technology and the product to market. It’s unrivalled.

“Leapmotor is a brand that produced in 2019 about 1,400 units. This year they will produce over a million units,” he says, pointing out there are now more than 1,000 Leapmotor retail outlets across Europe.

Much of that growth is built on manufacturing systems that European executives are increasingly travelling to China to study. In May, McGrath visited Leapmotor’s operations in Shanghai.

“I am 20 years in the industry. I’ve never seen factories, production and automation like it.”

He says it’s this level of production innovation that delivers the competitive pricing that is a big lure for many buyers and delivers on the Leapmotor tagline of “value without compromise”.

McGrath says control of the supply line for its models is also key to Chinese brands success. Leapmotor builds many of its own batteries, motors and related components from scratch, giving it greater control over costs and development cycles.

As for the quality of the facilities, McGrath says that if he had arrived in the motor factory blindfolded, he “would have said [it was] a pharmaceutical factory”.

A visit to a quality check line also revealed the startling pace of change. He was told that currently 30 people work per shift completing a set of specific checks. However, by the middle of next year they will no longer be needed for these shifts “because the cars will self-drive and self-check. They’ll either go back if there are any quality issues, or they drive themselves out to the car park to be picked up by a transporter.

“That’s the kind of level of savings they can make through having the latest technology to manage the factories and being just so up to date on the forefront of it all.

“It’s amazing what they can achieve and have achieved in such a short space of time.”

McGrath, who spent decades in his career working with European mainstream brands, says “European brands refresh products every few years. Chinese brands are launching entirely new vehicles at a pace that legacy manufacturers struggle to match.”

A case in point: Leapmotor plans to add six additional model ranges in the next 18 months, expanding into almost every major market segment.

“To be launching six model ranges and multiple power trains and batteries within the space of 18 months is completely unheard of,” says McGrath.

“We’ve recently launched the B05 hatchback and that’s our fourth model range so far. We’re launching another one in the coming months. And then come February we’ll have B03 after the B03X. So within 18 months, we’ll have about 90 per cent coverage of the leading segments in the market.”

Are Irish buyers still nervous about Chinese brands?

“Consumers are happy now to go Chinese because they really trust the brands in a way they wouldn’t have five years ago. But these days our phones, our fridges, our laptops come from China. We know the quality is good. I think, for Leapmotor, they’ve gone above and beyond that.”

He argues that Irish buyers have moved beyond concerns about Chinese manufacturing quality and are increasingly judging Chinese brands against each other rather than against European counterparts.

It also helps that Leapmotor has strong links to an established European giant, Stellantis.

With brands such as Opel, Citroen, Peugeot, Fiat and Alfa Romeo, to name but a few, Stellantis has a 51 per cent stake in Leapmotor International, which holds exclusive rights to sell and manufacture Leapmotor products outside China.

At an Irish level, the brand is operated by Gowan Group, which already holds the Irish distribution rights for Stellantis brands, along with others including Honda.

So, are customers considering their purchase as a car from China, a car from the Stellantis Group or a car from the Irish Gowan Auto Group?

“I think it’s a combination of all three. As you know, people are very well researched.” But the Gowan link also helps. “You know we’re pushing 60 years now, and people buy cars from people as well. So, there’s definitely a strength in that.

As for the Stellantis connection, he says that helps because you’re in the same brand houses as tried and trusted brands.

“But I think ultimately what has helped as well is we went for a six-year unlimited mileage warranty. Chatting to our dealers, that seems to be something that really gives the customer peace of mind.

“We knew the cars were good and the quality was absolutely excellent, but for something unknown, you want to let people know that they have that security there.”

“I think the levels of tech and spec that are on our vehicles is second to none. Our top-selling trim level is Design. There’s only about a €1,500 price walk on a retail level there after EV grants. But ultimately, the customer is getting about €4,000 worth of spec on a B10 or C10. So, it’s back to our tagline ‘value without compromise’ but it’s really secured by our underlying warranty.”

McGrath predicts Leapmotor will finish its first full year of Irish sales with more than 600 new cars on the road. In 2027 they expect that figure to reach 1,300 sales. He says it’s going better than even the initial ambitious plans.

What is luring customers to the brand? “I think what’s working extremely well for us is the price point. And the quality is phenomenal.”

Since its introduction to the market last autumn with two models, Leapmotor has secured a network of 12 dealers, with ambitions to double that for nationwide coverage.

McGrath says demand has already outstripped supply this year, with dealers selling out of some models before replacement stock has arrived. “We sold completely out of C10 and B10 EVs by July 1st and we have customers waiting on the C10s which landed last week and the B10s are now landing this week. It’s about keeping the momentum going for us.”

Part of that momentum is having a strong presence at events such as the Nevo EV show. “For us, we’re ultimately the newest kids on the block. We get to raise our profile and awareness as a brand.

“Ultimately, as the brand sponsor, it was very important for us to make a very, very big statement. We’ll obviously be sharing the models we have currently, which is T03, C10, and B10, and then our newly launched B05.

“Then we’ll be revealing the B03X also.” This new model is a small compact crossover, aiming to win sales from rivals like the Volkswagen T Roc and Kia EV3.

McGrath says the show gives him and his team a chance to engage with the public “and chat to them, especially around the savings offered by EVs over regular combustion-powered cars. He says that after three years of driving an EV “there’s potentially €4,000 worth of savings”.

“I think everybody would want €4,000 in their back pocket.”