By Nick Carey
BEIJING, May 5 (Reuters) - China's carmakers are hunting for their own "Yaris moment" - the kind of locally tailored breakthrough that helped Toyota conquer Europe - as they race to turn booming exports into lasting overseas growth.
After early attempts that largely involved exporting China-designed cars with minor tweaks, automakers are now re-engineering vehicles from the ground up for foreign buyers, driven as much by fierce margin pressure at home as by opportunity abroad.
China's
overcrowded domestic market has been locked in a bruising price war for years, leaving many manufacturers struggling to make money. Overseas markets, by contrast, offer room to grow - and to charge more - if Chinese brands can persuade consumers they understand local tastes.
Major carmakers including BYD, Chery, Changan, SAIC's MG brand and FAW's premium Hongqi all have models in the pipeline designed specifically for export markets - from small hatchbacks for Europe to pickup trucks for Australia and Mexico.
At home, Chinese automakers cram cars with technology and sell them cheaply to compete. In Western markets such as Europe, they can often sell at double the price and still undercut established brands.
At the Beijing Auto Show in late April, Hongqi unveiled a small "global SUV" targeted for sale in 80 countries. But the vehicle was primarily designed for urban European buyers, design chief Giles Taylor told Reuters.
"That's the reason why that car exists," Taylor said.
BYD's Dolphin G hatchback was designed specifically for Europe and will launch in June. Stella Li, the electric vehicle maker's No. 2 executive, said the model was critical because hatchbacks account for more than 40% of new car sales in parts of southern Europe - a segment that barely exists in China.
"If we don't have the right car in this sector, we lose," Li told Reuters.
A SURVIVAL STRATEGY
For many Chinese carmakers, exports are a matter of survival as analysts predict consolidation will thin an industry crowded with more than 100 manufacturers. Vehicle sales in China are expected to remain flat or decline.
That excess capacity has already helped make China the world's largest vehicle exporter, overtaking Japan in 2024.
Gartner analyst Pedro Pacheco described the push to design cars for export as Chinese automakers' "Yaris moment", referring to Toyota's Yaris hatchback, designed in Europe for European buyers and credited with helping the Japanese carmaker gain a foothold on the continent after its 1999 launch.
Dan Hearsch, global co-leader for automotive at consultancy AlixPartners, said globally relevant models are "the Holy Grail for automakers," because scale lifts margins.
In Britain, Chinese brands doubled their market share in the first quarter to 14.2%. Across Europe, they nearly doubled their share last year to 6% from 3.5% in 2024, according to consultancy Inovev.
DESIGNING FOR EUROPEANS
Chinese automakers' rapid export growth risks stalling if it remains heavily reliant on vehicles designed for Chinese tastes.
"In China, they're quite experimental with expressions of colour," and material, said Alfonso Albaisa, Nissan's senior vice president for global design. Nissan's N7 EV in China features options - including a "pinkish mauve" interior - unlikely to resonate elsewhere.
The average Chinese car buyer is also far younger than consumers in Europe or the U.S., shaping design choices and optional features, said Francois Roudier, secretary general of the International Organization of Motor Vehicle Manufacturers.
For younger Chinese consumers, "karaoke in the car is certainly important", he said. "But for my dad - he's 95 - no."
Analysts say matching regional preferences will increasingly determine success as European rivals respond to Chinese competition.
"Just competing on price works first time around," said Phil Dunne, a managing director at consultancy Grant Thornton Stax. "But the Europeans are fighting back on cost."
He added: "The Chinese need to take it to the next level," by designing cars in Europe for Europeans.
For Europe, that also means going smaller.
Chery, China's biggest vehicle exporter, is heavily skewed towards SUVs, which accounted for 2.3 million of the 2.8 million vehicles it sold globally in 2025. But Ivan Dulanovic, head of design at Lepas - Chery's new international brand - said a Europe-focused hatchback, the Lepas 2, is in development.
"We have recognised a need in the market," he said, "and we are tackling that."
SAIC's MG also plans an MG2 hatchback for Europe where consumers "don't like huge cars", design chief Jozef Kaban said.
BYD aims to roll out more Europe-specific models and has told investors it wants half of sales to come from overseas by 2030.
LAUNCH PLANS
Pressure to grow overseas sales is also reshaping launch strategies.
Jetour, an SUV brand owned by Chery, designed its first fully electric car - the compact TX - with European buyers in mind, said Jetour International President Ke Chuandeng. Its upcoming F700 pickup will target markets such as Australia and Brazil and will launch in Mexico ahead of China, he said.
Chery will also bring a plug-in diesel hybrid pickup to Australia this year, said local managing director Lucas Harris.
"We're not kind to our utes," Harris said, using the local name for pickups. "So if it can survive here, it could probably survive anywhere."
State-owned Changan is developing a range of hatchbacks, compact SUVs and pickups for Europe and other markets, with launches expected from late 2027, design chief Klaus Zyciora said.
"The competition is so fierce and the investments are very high," Zyciora said. "So you need to make sure you get enough scale."
(Reporting By Nick Carey. Additional reporting by Qiaoyi Li. Editing by Brian Thevenot and Mark Potter)
