The IAA Mobility Show in Munich showcased a shift in the European auto industry, with Chinese brands redefining contract manufacturing previously used for overflow from European OEMs. Legacy OEMs are scaling back, leading to reduced demand for external manufacturing. Chinese automakers like GAC and Xpeng are localizing in Europe to avoid tariffs and cater to European preferences. This marks a broader trend of Chinese models entering Europe with a focus on localization. For European contract manufacturers like Magna Steyr and Valmet, partnering with Chinese OEMs offers a lifeline in a changing market landscape. The European auto industry faces a market realignment as Chinese brands gain traction.

Read more at Yahoo Finance: Will Chinese OEMs revive Europe’s contract manufacturers?