Asian brands committed to electrified powertrains, a low-cost champion and an "EV pioneer" made the biggest gains in market share in Europe over the last five years.
The biggest winners were Toyota, Kia -- each adding two percentage points or more of market share since 2017 -- followed by Hyundai, Dacia and Tesla, according to figures from market researcher Dataforce (see table, below).
Key factors in the Japanese brand's success were its ability to navigate supply chain disruption better than many competitors and its focus on selling hybrid cars, Toyota Europe CEO Matt Harrison told Automotive News Europe on the sidelines of the Automobilwoche conference last week.
Toyota's belief in hybrids, which account for the vast majority of its sales in Europe, turned what was once a glaring weakness -- uncompetitive diesels -- into a strength.
"Hybrid sales really took off in the last couple of years as people looked for alternatives to diesel," said Benjamin Kibies, senior automotive analyst at Dataforce. "They are the most straightforward answer if a person is looking for an electrified powertrain but isn't ready to buy a car with a plug."
The Japanese automaker benefited from Europe's shift away from what was formerly the region's favorite powertrain after diesels were sullied by Volkswagen Group's emissions-cheating scandal and hamstrung by tougher pollution rules that include bans preventing cars with the powertrain from entering city centers.
Toyota also has successfully strengthened its lineup by adding models such as the CH-R compact SUV and Yaris Cross small crossover -- both are offered with hybrid powertrains -- and by building loyalty outside of Europe's core markets.
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"Their gains were mostly in eastern European countries such as Poland," Kibies said.
Toyota through eight months had the top-selling model in a total of seven countries (see chart, right).
Markets where Toyota models were the No. 1-sellers after 8 months
- Bulgaria
- Estonia
- Finland
- Greece
- Latvia
- Lithuania
- Poland
Source: Dataforce
The automaker, however, isn't without a weakness.
"They appear to be like lost puppies when it comes to battery-electric vehicles," Philippe Houchois, an analyst at Jefferies, said, pointing to the troubled launch of the BZ4 SUV, which was recalled in June.
The automaker has faced criticism for not moving faster to embrace full-electric cars and pushing hybrid technology instead. Last week Reuters reported that Toyota was considering a reboot of its electric vehicle strategy and has halted some work on existing EV projects.
Houchois, however, isn't worried about Toyota long-term prospects.
"This near-term weakness will eventually be sorted out," he said. "The execution capability of that company is remarkable."
Chip champions
Like Toyota, the South Korean sister brands Kia and Hyundai have done a better job than rivals securing semiconductors and other components. Despite this success, Michael Cole, the first non-Korean top boss at Hyundai Europe, told Automotive News Europe in August that his brand was still held back by the shortages.
"With a better supply, we would have had a better first half this year than we did in 2019. I'm also confident we would have even beaten our previous record for half-year sales, which was 290,000 in the first half of 2018," Cole said. He estimated Hyundai's sales could have been 20 percent higher than the 263,000 units it sold during the first half.
He boosted Hyundai's share with help from new products such as the full-electric Ioniq 5, which was Europe's No. 10-selling volume EV after eight months with sales of 22,742 units.
"Their EV offer is quite good," Houchois said. "Hyundai's and Kia's offer often matches Tesla in terms of the efficiency of their powertrains. That hasn't gone unnoticed by customers."
Houchois sees another advantage that will continue to benefit the brands in the future: "They've got a natural access to batteries given the Korean shareholder base."
Dataforce's Kibies praised Hyundai's and Kia's diverse portfolios.
"They are one of the few brands that offer everything from mild hybrids to full hybrids to plug-in hybrids to electric," he said.
Through eight months, Kia models appeared 26 times in the top 10 rankings of 30 European markets monitored by Automotive News Europe and Dataforce. Hyundai models appeared 18 times. Toyota was No. 1 with 56 appearances followed by VW brand with 40, Skoda with 28, then Kia, and Dacia rounding out the top five with 25.
Less than 20,000 euros
Kibies said something that Toyota, Hyundai, Kia and Dacia have in common is that their lineups include models that are less than 20,000 euros. But of the four, only Dacia has an entire portfolio of models that start under that number in Germany, led by the Sandero with a base price of 9,600 euros in Europe's largest market.
"They have really done a great job keeping prices at a level that entry buyers want," he said.
The sales and market share success of Renault Group's low-cost brand has coincided with a steep decline at the company's namesake brand.
Renault suffered the largest loss of market share -- a 2.2-point dip -- of any brand during the five-year period (see chart, below).
Kibies said there is some cannibalization between the Renault and Dacia brands.
"If a customer wants a smaller, inexpensive car and they [Renault and Dacia models] are often offered in the same showrooms, why not go for a Dacia?" he said.
While this could happen, Dacia CEO Denis Le Vot said there would be no Dacia without Renault.
"It's important to remember that Dacia exists together with Renault. What we are doing is re-engineering the base product from Renault," Le Vot told Automotive News Europe in April.
He said it took Dacia two years to take costs out of the CMF-B platform that first underpinned the Renault Clio and Captur. As a result, Dacia could "launch the new Sandero as a B-segment car that starts below 10,000 euros."
Le Vot will try to repeat the success as he expands Dacia's model range from small cars to the more profitable compact segments, starting with the new Jogger seven-seat family car, and continuing with the Bigster compact SUV -- all while keeping Dacia's low base prices.
The executive also believes Dacia is poised to continue increasing share because of macroeconomic challenges.
"We see that cars are getting more expensive, with the prices of raw materials going up, and the more that happens, the more people come to Dacia," he said.
Pioneers in EVs
Rounding out the top five when it comes to market share winners was Tesla, which has gone from a relative unknown in Europe to headline-dominating powerhouse.
"They are the pioneers in EVs," Kibies said. "And if you compare them to other brands they still have the advantage because they have the perfect package: cars, an extensive infrastructure compared with rivals and excellent software."
Tesla has Europe's No. 1- and No. 2-selling EVs, the Model Y and Model 3, respectively. With a volume of 53,898 through August, the Model Y was also Europe's best-selling premium midsize SUV, ahead of the Mercedes-Benz GLC and BMW X3.
The Model 3 ranked third in the midsize premium segment behind the BMW 3 Series and Mercedes C-Class but well ahead of the Audi A4, according to Dataforce's figures.
Houchois said that one knock against Tesla is the company's "erratic" deliveries in Europe.
"They will have nothing for two months and then everything in the third month," he said. "That's not how you build market share."
He believes, however, that issue could be solved now that Tesla's plant in Germany is steadily rolling out Model Ys.
Share slides
Along with Renault, the brands that lost the most share during the five-year period were Opel, Ford, Nissan and Fiat.
Renault CEO Luca de Meo is the third chief executive to lead the automaker during the period. When he started in July 2020, de Meo inherited a company that lost nearly 8 billion euros in the first six months of that year.
While Renault has made incremental improvements under de Meo, Kibies underlined one of the brand's biggest problems.
"There is not a single vehicle segment where they experienced growth this year," he said.
When asked whether that included the compact SUV segment, where the Arkana has been a surprise success, entering the top 10 in its first full year of sales, Kibies said the dramatic decline of Renault's other entrant in the segment, the Kadjar, has been too great for the Arkana to offset. Renault is pinning its hopes on the new Austral to regain share in the segment.
Opel's loss of more than two points of market share was partially expected since it slashed its lineup of GM-based models during the period and pulled itself out of high-volume, low-margin sales channels such as rental car fleets. Both of those moves were made to reduce Opel's breakeven point after it became part of PSA Group. This strategy has continued as it became part of Stellantis.
Kibies pointed out that although the moves have helped make Opel profitable, the brand has been shedding market share for years.
Houchois said Opel's profits are partly due to higher car prices and low incentives as a result of the ongoing supply chain issues.
He said slimming down a portfolio "is a one-off cleanup" but not a long-term solution.
Opel's Stellantis sister brand, Fiat, also has trimmed its lineup, and Kibies believes brands such as Jeep are being given preference within the 14-brand group.
Added Houchois: "My impression is that Stellantis is trying to specialize the brands, and Fiat will never become a full line manufacturer again."
The next five years: Enter the Chinese
Maintaining market share gains will be just as difficult for the current winner as it will be for the loser to claw back lost ground as Europe braces for a wave of new entrants from China.
Several of them -- BYD, Wey and Ora -- showcased vehicles at last month's Paris auto show.
In its bid to enter Europe, BYD will initially sell three full-electric passenger vehicles in six European countries. BYD is also being courted by governments in Europe that would like it to invest in their countries as the company contemplates manufacturing cars locally.
Automakers led by Stellantis are surprised by how favorably the potential disruptors are being treated on their home turf.
"Chinese manufacturers are welcomed in Europe with a red carpet," Stellentis CEO Carlos Tavares told reporters in at the Paris show, adding that non-Chinese brands are not getting the same treatment.
Tavares also believes Chinese automakers should be subject to the same tariffs when exporting their cars to Europe as European brands face when sending their cars to China.
The Stellantis CEO also said the company may stop manufacturing cars in China as geopolitical tensions escalate, and Western manufacturers cede market share to domestic players.
Tavares' tough talk worries Houchois because the same pronouncements are not coming from the heads of German automakers, which are more successful than Stellantis is in China.
"I think the Germans have chosen to side with the Chinese on this one," he said. "The German have too much capital tied up in China" [to try to stall the entry of Chinese brands in Europe]. This will be a huge source of tension between France and Germany."
The person leading the brand with the biggest market share gain of the last half decade said Chinese brands see a "great opportunity" in Europe because of the region's push toward electrification.
"They are focused on Europe now," Toyota's Harrison told ANE. "They are formidable competitors with strong products and strong multimedia offerings."
But Harrison is not ready to cede any of Toyota's gains to the newcomers in Europe, where it ranked No. 2 after VW brand after eight months (see chart, below).
"We are not complacent at Toyota, and we have a strong position in Europe. The question for the Chinese brands is how fast they can localize production in Europe and establish sales networks."
