A doorway to future growth: how Asian OEMs can build connected car market share in Europe

Asian OEMs are making headway in the European automotive market. But to sustain their growth, they need to overcome various obstacles. Does connectivity and the right partner hold the key to connected car success?

Electric vehicle makers from the Asia Pacific region are making quite the impression. A report highlighted how sluggish movement from American and European original equipment manufacturers (OEM) had been exploited by their Chinese EV counterparts, with one securing a 6% market share.

Elsewhere, U.S. electric bus manufacturer Proterra filed for bankruptcy earlier in the year as it struggled to turn a profit. Analysts highlighted how Proterra’s thousands of sales pales compared to Chinese OEM BYD, which is predicted to sell three million electric buses in 2023. And while much of that business will take place in China, the company’s manufacturing infrastructure and scale make it easier to sell internationally, while North American and European OEMs struggle to compete.

Tackling the logistics of the European market

Yet, while Chinese EV OEMs are growing market share in Europe, with eight percent of EVs sold in 2023 made by Chinese brands such as NIO and BYD, it isn’t all plain sailing. They’re realizing that, despite EVs in China having a lower average price than in Europe, they can’t replicate those prices in Europe. Logistics, sales taxes, import duties and ensuring compliance with local regulations all add up.

Plus, buyers lack brand recognition; one article noted that most potential buyers do not recognize Chinese brands, and those that do are hesitant to purchase a Chinese car. It’s reminiscent of what South Korean and Japanese OEMs faced several decades ago when they tried to enter Western markets.

The three pillars to connected car market success

While securing consumer trust by developing safe yet less expensive vehicles will certainly help, ultimately, growing European market share will depend on three factors:

  • Digitalization of the in-car user experience
  • Maintaining customer relationships
  • Delivering complete security

When it comes to experience, buyers are increasingly turning away from traditional differentiators (such as engine performance) and focusing more on the in-car experience. New OEMs understand this, with multiple screens, chatbots, infotainment apps and autonomous features often becoming standard. Yet it all requires connectivity, where the difference between the markets needs to be overcome.

In China, for instance, Wi-Fi hotspots and connected services are included in the price of the vehicle, which isn’t the case in Europe. Part of the reason for that is the added regulatory complexity: while China and the European Union are the same size market, China is one country, while the EU is many.

This isn’t just a struggle for Chinese manufacturers; it’s a challenge all non-European brands must overcome.

However, the lack of brand recognition is specific to new entrants from Asia. One study found that while 10% of consumers aware of Tesla would consider buying one, just 1% of those familiar with Chinese brands would consider buying from the likes of BYD, NIO or XPENG.

While many OEMs focus on test drives and showrooms to tackle the lack of awareness, there’s also the question of building and maintaining long-term relationships. It’s an issue all EV manufacturers struggle with, lacking as they do the regular maintenance schedules and servicing that come with internal combustion engine vehicles. Some manufacturers, such as NIO with its battery-as-a-service model and Lynk & Co with its membership approach, seek to cement relationships through other means.

But central to those relationships is trust, particularly around OEMs' ability to protect drivers, passengers and their data from cyberattacks. These range from the physical, where the digital nature of the vehicle is used against it to allow theft, to true cyber threats, where the data, access and even the control of entire fleets are targeted.

As they seek to build trust, new EV OEMs must demonstrate that their customers are completely secure when using their vehicles.

Does connectivity hold the key?

These are all complex challenges that need to be mastered. A common thread is running through all of them: the role of connectivity.

OEMs developing connected vehicles are well-versed in the need for connectivity. They already partner with local providers in their home markets to enable exemplary experiences, build digital models that empower relationships and secure their customers and their data.

But when it comes to Europe, an altogether more fragmented market, those local telcos are one step removed. They, in turn, need to find new partners, businesses with the on-the-ground presence and knowledge to help overcome the specific issues that Chinese OEMs face when growing in Europe.

And while connectivity is critical, it isn’t just about network access; partners need to offer value beyond guaranteed connectivity. For instance, understanding the importance of streaming in-car infotainment while providing options on how it can be funded is critical to enabling the driver and passenger experience.

It also needs to have security embedded, not just as a bolt-on. A specialism in customer relationships is also vital.

Many Asian OEMs view Europe as a starting point for other markets, so if a local partner can support connectivity outside the region, that would be a major benefit.

How some OEMs are benefiting from European expertise

It’s the sort of value that Lynk & Co benefits from with its partnership with Orange Business. The company offers customers a membership-based mobility model to access an always-connected vehicle without huge upfront expenditure.

Controlled and monitored via a smartphone app, with touchscreens and telematics within the car to enhance the experience, Lynk & Co’s SUVs use the Orange IoT Managed Global Connectivity solution to enable its connected car services, Internet access and online tracking. With SIMs integrated during manufacturing, drivers benefit from Orange IoT cellular connectivity to enjoy the same experiences across multiple geographies as they roam between different providers.

Orange is also working with KDDI, the Japanese telecoms provider, to provide a customized IoT platform for Japanese OEMs Toyota and Mazda. This allows the OEMs to offer connected car capabilities in their vehicles sold across 63 European countries and territories, using Orange cellular connectivity.

Whether a new EV entrant or an established OEM looking to increase connected car market share, Europe offers significant opportunities. It is complex, with a regulatory-fragmented market making it harder to provide the same services in Asia. However, partnering with the right local experts can make the transition easier and develop the foundation for future growth.

Orange Business is the digital connectivity partner for the automotive sector, working with OEMs and their partners to unlock the connected car. To find out how we could help you deliver fantastic in-car experiences, maintain customer relationships and secure it all, look at our dedicated site.

Patrick Jeanbart
Patrick Jeanbart

Patrick is Head of Connected Car Vertical, Smart Mobility Services at Orange Business. He has 18 years of experience in the automotive industry, which has allowed him to specialize in management positions in the areas of customer relations, after-sales, financial services and connected services worldwide. His purpose is to enhance these domains thanks to the operational management of cross-cultural teams around the world.