Europe must brace for impact of Chinese competition, BMW boss warns

European carmakers need to gear up for increasingly fierce competition from Chinese competitors on their home turf, BMW boss Milan Nedeljkovic said Wednesday.

"It's clear that China is having an impact in Europe," he told reporters at a new BMW battery factory in Bavaria.

"We haven't yet felt a direct impact, but the inevitable consequence will be downward pressure on prices," he said, adding that "sooner or later, we will face that price pressure".

Years of declining sales amid falling demand and cut-throat competition in China, the world's largest car market, have cost Germany's automotive titans dearly.

Volkswagen plans 100,000 redundancies across its 10 brands by 2030. BMW itself aims to cut 8,000 jobs by the end of next year.

Facing a fierce price war at home, Chinese brands such as BYD and Xpeng have stepped up exports abroad.

Chinese carmakers took almost 11 percent of the European market in May, according to automotive intelligence firm Dataforce, up from just under three percent three years ago.

Asked what BMW could learn from its Chinese competitors, Nedeljkovic said the Munich-based carmaker would rely more on off-the-shelf components as opposed to its own or custom-made solutions to bring costs down.

"In China, if you look at the vehicles on the market there, you'll see that almost all of them use the same components from the same suppliers," he said.

"Standardisation has emerged there out of the need for growth, or speed, or whatever the reason may be," he said. "It doesn't seem to matter to the customer at all."

Asked about so-called Made in Europe rules -- proposals being discussed in Brussels intended to favour EU manufacturers in subsidies and public procurement to defend against Chinese competition -- Nedeljkovic urged caution.

"We're just hurting ourselves if we take too many unilateral measures," he said. "They always lead to a response."

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