European car market rebounds strongly! Sales in June achieved the biggest increase in nearly three years, with electric cars serving as a "life-saving straw".

With the sharp increase in sales of pure electric vehicles, European car sales rebounded strongly in June, bringing a sigh of relief to European car manufacturers facing rising costs and competition pressure from Chinese car companies. Data released by the European Automobile Manufacturers' Association (ACEA) on Thursday showed that new car registrations in Europe increased by 13% year-on-year to 1.41 million units. This is the largest year-on-year increase since October 2023. Battery-powered vehicle sales increased by 51% year-on-year, leading to plug-in vehicles (including pure electric vehicles and plug-in hybrid vehicles) accounting for more than one-third of the market share. European car sales in June increased by 13% France and Germany are the largest electric vehicle markets in Europe. Under the new incentive policies, these two countries contributed most of the sales growth. Electric vehicle sales increased in all European countries except Poland. In addition, the consistently high fuel prices are also weakening consumer willingness to purchase fuel vehicles. This performance is encouraging for car manufacturers including Volkswagen Group and Stellantis NV (STLA.US). These companies are restructuring their businesses to better compete with Chinese car manufacturers - including BYD Company Limited and Geely - expanding their presence in the European market. Although the registrations of European traditional car manufacturers have increased, the market share of Chinese brands is also rising, mainly driven by the UK market. UK's Society of Motor Manufacturers and Traders (SMMT) data shows that BYD Company Limited and MG, owned by China's SAIC Motor Corporation, both saw registrations in June increase by more than one-third. In March of this year, the Chery Auto's Jetour 7 model became the best-selling car in the UK. In the entire European market, MG, a brand under SAIC, and BYD Company Limited had a combined market share of 5.4% in June last year, up from 3.4% a year ago. These new competitors are providing European consumers with more attractive deals. A report at the end of June stated that the competition brought by Chinese brands is forcing European car manufacturers to lower prices and offer more incentives. As Chinese manufacturers further promote localized production, competitive pressure is expected to remain high. For example, BYD Company Limited is building a factory in Hungary. Earlier this year, Stellantis, the parent company of Fiat, agreed to allow Zhejiang Zero Run Technology and Dongfeng Motor Group to enter their European factories for production. Performance of major car manufacturers in June The growth in registrations of European car manufacturers will provide some relief for them. These companies are currently facing dual pressures of high domestic production costs and low sales in the world's largest car market, China. Europe's largest car manufacturer, Volkswagen, is currently facing one of its most serious crises. The company is considering further cutting 50,000 jobs, potentially bringing the total potential layoffs to 100,000, and may close up to four German factories. In addition, Volkswagen plans to reduce its brand portfolio, including Porsche, Audi, and SEAT, which currently have around 150 models, potentially reducing by half in the future. Cost-cutting measures are also being implemented by other car companies. BMW Group, Mercedes-Benz Group, and French car manufacturer Renault Group are all seeking to further improve operational efficiency.