The dynamics of change: How new brands are shaping the German vehicle market

Over the last few years, the vehicle industry has been undergoing a transformation that is redefining traditional boundaries and market structures. For decades, established players dominated the market, but the introduction of e-vehicles and new sales models opened the door for new competitors.

Growing market shares signal a shift

A wave of new manufacturers and brands have since entered the playing field, fuelled by disruptive technologies and changing consumer preferences. In Germany, brands such as Tesla, BYD, Lotus, Lynk & Co, MG, and Polestar have also clearly signalled their interest: With increasing market shares and a proliferation of their local locations they have led to a more diverse German market landscape. Tesla is particularly strong in terms of volume with 60 % of the market share among new brands. However, this may also be due to the fact that they have been on the market for a relatively long time compared to the other new entrants. MG, on the other hand, did not enter the German market until 2021, but has already achieved a market share of 20 % among new brands.

These developments signal not only an increase in competition, but also the start of a new dynamic in the automotive industry. It presents new challenges for established vehicle manufacturers, but also offers untapped opportunities.

Sales models and partnerships

Alongside the choice of the overall sales model, there has been another interesting development arising from the new competitive environment: the increasing importance of partnerships. For both new and established manufacturers, cooperation in certain areas has proved worthwhile. Sharing resources, knowledge and technologies can, for example, shorten development times and at the same time speed up market launches.

While brands such as Tesla and Polestar tend to focus on online sales, combined with inner-city showrooms and delivery centres, brands such as MG and BYD are pursuing a completely different strategy. They link up to existing dealer networks as an additional brand and can therefore have a higher number of sales outlets, but have in return a lower volume per outlet. Established manufacturers, on the other hand, can rely on a relatively dense sales network as a result of their longer presence in the market. This means a higher number of locations with medium volumes per location.

An all-out upward trajectory?

Several new brands recorded an increase in market share in 2023 compared to the previous year, in some cases quite significant increases of over 100 %. But is this actually a landslide movement? A look at the year-on-year change reveals more.

Despite the general trend towards diversification and the increasing number of new players on the automotive market, some of the new brands in Germany suffered a market share drop in 2023: In some cases, market shares went down by -10 % and even by as much as -65 % compared to 2022. A perhaps unexpected turn of events that paints a rather complex picture of both success and challenges. It underlines the need for all brands to be flexible and adaptable in order to remain competitive.

Last updated May 2024

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