Local providers can deliver the essential “downstream” services that incoming OEMs need to grow their businesses in Europe.
The influx of Chinese manufacturers into the European vehicle market is opening big opportunities for financial services firms. New arrivals such as BYD, Xiaomi, SAIC and Geely are likely to need a variety of support services to increase their presence in Europe. And local financial services providers are well placed to deliver the backing they require.
“The difficulty Chinese OEMs face in Europe is how to get their horsepower on the tarmac.”
Markus Collet, Partner, CVAChinese automakers are already notching up strong sales in Europe by marketing high quality vehicles at eye-catching prices. They’ve been especially successful in marketing electric vehicles (EVs) where their innovations in battery technology, software architecture, and digital experiences have earned them an edge over competitors. And they’re well placed to capitalize on Europe’s transition from traditional ICE (internal combustion engine) vehicles to EVs.
“Chinese OEMs are the success story of the automotive world. Their share of the global passenger car market has increased from 7 million units in 2012 to 17.3 million in 2023. It’s jumped from 11% to 24%. Their success has been built on the quality of their products, their R&D and their industrial set-up,” says Markus Collet, Partner at consulting firm Corporate Value Associates (CVA).
“We have transformed and streamlined our organization, leveraging the know-how of different business lines, to build the capacity to create win-win partnerships that benefit us and the new OEMs.”
Thierry Rougeot, International Partnerships Director Mibs/CFS, Société GénéraleHowever, automakers from China currently lack the support infrastructure they need in Europe to successfully deliver essential “downstream” services such as vehicle financing, distribution, service and repairs. They need support from automotive service providers.
“The difficulty Chinese OEMs face in Europe is how to get their horsepower on the tarmac. This will require downstream capabilities such as sales offices that can set pricing, the right B2C and B2B channels, appropriate finance, asset management, and insurance, and access to vehicle service and repair networks.”
Financial services firms in Europe can provide Chinese OEMs with value propositions that meet the new entrants’ service, insurance, financing and asset management needs, adds Collet.
He was speaking at an online event, hosted by the Qorus Mobility Community, that examined the opportunities and challenges facing financial services firms in the wake of the arrival in Europe of OEMs from Asia and America. At least 10 OEMs have entered the European market in the past four years. Also speaking at the event were representatives from Société Générale, CA Auto Bank and Allianz Partners, leading financial services providers that have begun working with incoming OEMs.

“Ecommerce looked to be the Golden Gate for Chinese OEMs coming into Europe because it seemed a less expensive and quicker way to get into the market. But that hasn’t been the case.”
Lucyna Bogusz, Head of Sales, Marketing and Business Development, CA Auto BankAll the speakers acknowledge that financial services firms looking to capitalize on the arrival of OEMs from China and elsewhere in Asia need to build close partnerships with the emerging automakers.
“We have transformed and streamlined our organization, leveraging the know-how of different business lines, to build the capacity to create win-win partnerships that benefit us and the new OEMs,” says Thierry Rougeot, International Partnership Director for Mobility, International Banking and Financial Services at Société Générale. The financial services group has entered into five partnerships with incoming OEMs while its fleet management and leasing company subsidiary Ayvens has secured seven white label agreements with emerging automakers.
Financial services executives who attended the online event acknowledge the importance of building close ties with emerging OEMs. Nearly 70% of those polled identified strategic partnerships as the key requirement of new OEMs entering Europe. And around 30% pointed to operational and delivery partnerships.
CVA’s Collet points out that Chinese OEMs are unlikely to launch into strategic partnerships early in their foray into Europe. They will more probably start by embarking on operational and delivery partnerships with local service providers and gradually build those ties into more strategic relationships.
In-demand financial services offerings for emerging OEMs
Financial services firms can build relations with incoming OEMs by providing them with a range of offerings. They include:
- Tailored finance and insurance products designed for different customer segments.
- Integrated insurance offerings that address EV risks, such as battery degradation, software failure, and charging point coverage.
- Embedded financing, insurance and assistance solutions that can be incorporated into OEMs’ digital sales platforms and vehicle dashboards.
- Advisory services that provide insights into key sectors of the automotive value chain, regulatory requirements and specific features of geographic markets.
- EV residual value management approaches that address the multiple lifecycles of electric vehicles and their total cost of ownership.
- Service and repair networks that can accommodate bundled insurance, service and warranty packages provided by OEMs.
- Data management platforms that support OEMs’ data-driven mobility initiatives.
Lucyna Bogusz, Head of Sales, Marketing and Business Development at CA Auto Bank, adds that partnerships with OEMs offer financial services firms an opportunity to extend their traditional automotive offerings.
“I think Chinese EV manufacturers will disrupt the European market more than traditional OEMs expect because of their software capabilities.”
Bertrand Hartemann, Head of Partnerships, Allianz Partners“Emerging OEMs, even if they are big in their home countries, are looking for partners in Europe to help grow their businesses. Financial services companies have an opportunity to grow together with these newcomers. They can become 360°partners and provide not only classical automotive financial services but also finance, for example, OEMs’ investments in import facilities and manufacturing in Europe.”
Bogusz expects financial services firms to support emerging OEMs in their sales drives through traditional dealer networks and digital ecommerce platforms.
“Ecommerce looked to be the Golden Gate for Chinese OEMs coming into Europe because it seemed a less expensive and quicker way to get into the market. But that hasn’t been the case. Chinese OEMs are now opting for the traditional distribution model because it’s a more efficient way to acquire new customers. The dealer is still the best ambassador for your new brand. In future, OEMs will probably use a combination of the two distribution models.”
Big obstacles to successful OEM partnership
Supporting emerging OEMs, however, does present financial services firms with some significant challenges.
- Partner risk – The creditworthiness, import duty compliance, financial guarantees and business viability of emerging OEMs must be verified.
- Adaptability – OEMs may need to change their business strategies to adjust to shifting market conditions and financial services firms supporting those automakers must be able to accommodate such changes.
- Residual values – Financial services firms that partner EV automakers need to develop risk management frameworks that address the residual value volatility of used electric vehicles.
- Complexity of EV financial products – Limited historical data on EV claims, repairs, and performance complicates the design of insurance and leasing products developed for the electric vehicle market.
- Fragmented regulatory landscape - Adapting solutions to meet the varied regulatory requirements across European countries adds to the operational complexity of partnerships with OEMs.
Nonetheless, ongoing advances in EVs and mobility ecosystems are likely to create further opportunities for tech-savvy financial services firms.
“I think Chinese EV manufacturers will disrupt the European market more than traditional OEMs expect because of their software capabilities. Software defined vehicles are going be key,” says Bertrand Hartemann, Head of Platform Partnerships and Services Solutions at Allianz Partners.
“We are already supporting a Chinese EV supplier and what they value about us is our ability to plug insurance and assistance products straight into their digital environment.”
Hartemann adds that successful partnerships with a Chinese OEM will increasingly require financial service providers to connect with other participants in the automaker’s ecosystem.
“Partnering with Chinese OEMs triggered a change in our mindset. We discovered that also needed to partner with other ecosystem players, such as Tencent Cloud, that support EVs and software-defined vehicles.”
Hartemann’s colleague, Dan Zhou, Head of Internal Partners Management (APAC) at Allianz Partners, adds that the multinational insurer is working closely with OEMs to develop tailored digitized solutions.
“We have developed integrated digital solutions that provide a digital layer to onboard and facilitate insurance and assistance services within the purchase journey of the clients and within the ecosystems of our business partners.”
Allianz is also looking to support OEMs by providing them with extensive EV charging solutions, a global data and telematics platform, and variety of mobility-as-a-service offerings.
Five key strategic steps for successful OEM partnerships
Financial services firms eager to seize opportunities emerging from the arrival of new OEMs in Europe need to adopt a strategic approach to co-operating with incoming automakers. Five steps are key:
- Collaborate with OEMs early to develop tailored financial solutions that are aligned with the automakers’ business strategies.
- Use data and telematics technologies to create real-time, usage-based products that can be integrated with OEMs customer ecosystems and data-intensive vehicles.
- Work closely with OEMs to establish strong consumer relationships that are built on convenient, cost-effective and personalized products that deliver exceptional customer experience.
- Develop flexible and scalable systems and processes that can be adapted quickly to align with evolving OEM strategies.
- Ensure financial solutions support national sustainability goals and regulations.
The arrival of Chinese and other Asian OEMs is reshaping the European automotive sector. Financial services firms that align themselves with incoming OEMs and provide the downstream products and services they need can establish themselves as key strategic partners. This alignment will put them in pole position to capitalize on the growing market presence and influence of emerging OEMs in Europe.
