(Bloomberg) -- Germany’s leading automakers from Volkswagen AG to BMW AG are attempting to mount a comeback in China after the rapid shift to electric vehicles eroded their share of the world’s biggest auto market. 

At this week’s Auto China show in Beijing, top executives from BMW boss Oliver Zipse to Mercedes-Benz Group AG Chief Executive Officer Ola Kaellenius will be in attendance, while VW will showcase 44 models — half of them EVs. The Wolfsburg-based automaker, whose at least 15-year reign as China’s top-selling brand was ended by local champion BYD Co. last year, will also unveil its electric concept car dedicated to the Chinese market — its design and development a litmus test to see if it has learned how to cater to local tastes.   

It’s the first time China’s premier car show — which starts April 25 and runs until May 4 — has been held in the capital since 2020 (hosting rights alternate with Shanghai, and Beijing’s 2022 slot was canceled because of the Covid pandemic). 

Since then, domestic Chinese automakers have increased their market share to more than 50%, led by BYD which sold 2.77 million cars locally last year. Add in the likes of Nio Inc. and Li Auto Inc. and they have an even firmer grip on the new-energy vehicle market, which includes pure battery and plug-in hybrids. 

Overall, the Germans’ share of China’s car market fell to its lowest in six years in the final quarter of 2023, though there has been a slight rebound in the first two months of this year. Japanese, South Korean and US automakers have also suffered because of a lack of electric models. 

“For global carmakers, China is a race to the bottom, because we think by 2030 the local manufacturers will have a dominating role with 80% plus market share,” UBS Group AG analyst Patrick Hummel said.

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Electric cars make up less than 10% of VW’s sales in China, and most are European designs — such as the 195,888 yuan ($27,000) ID.4 X sport utility vehicle — that hold little appeal to local drivers, who increasingly prefer tech and gadget-laden cars from domestic manufacturers that can respond to Chinese-language voice commands and link to local social media sites. 

Those include BYD’s budget Seagull hatchback  — which sells for 69,800 yuan, or less than $10,000 — or Xiaomi Corp.’s new SU7, which comes with AI-assisted automated parking, heads-up display and two seat-back extensions that allow for the mounting of two tablet devices. The company said it has locked in more than 70,000 orders after the car was launched late last month. 

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As part of its counter-offensive, VW last year made a $700 million investment in Xpeng, and the first fruits of that deal will be on display in Beijing. The automaker will showcase an EV concept car planned exclusively for China that will hit the market in about two years. Oliver Blume, the CEO of Volkswagen and Porsche, will attend the show, along with Audi boss Gernot Doellner and the luxury brand’s sales head Hildegard Wortmann. 

VW last week unveiled a new digital architecture developed with Xpeng to make its electric vehicles more appealing in China, though those vehicles won’t hit the market until early 2026. 

“With its current EV lineup, VW doesn’t have the lever to turn the market in China,” Stifel analyst Daniel Schwarz said. 

Read More: Volkswagen to Face Investors Skeptical of China Turnaround Plan 

Audi’s highlights include the premiere of its all-electric SUV Q6 e-tron long wheel base variant, and displays of the Q5 e-tron and Q4 e-tron compact SUVs. 

Mercedes will host the world premiere of the electric version of its iconic G-Wagon, an SUV geared for rough terrain and able to rotate on the spot due to four electric motors, one for each wheel. The luxury car-maker will also show its updated top-end EQS electric sedan after disappointing sales for the original version. The redesign comes with more spacious “executive” rear seating, which may play well with wealthy Chinese who often prefer to be chauffeured around.  

BMW will display its Neue Klasse SUV all-electric concept car, which is expected to hit the European market in late 2025 or early 2026, while its Mini brand’s Aceman EV crossover will make its global debut. Developed with China’s Great Wall Motor Co., the five-seater has an expected range of around 250 miles (400 kilometers). China is BMW’s biggest market, accounting for 32% of unit sales and 26% of total revenue in 2023.

While BMW and Mercedes may lose some EV market share in China in coming years, it’s not as critical an issue as it is for VW, said Stifel’s Schwarz. “In the premium car market, competition from Chinese EV manufacturers isn’t as strong. And Chinese luxury car buyers don’t seem too keen to drive all-electric vehicles,” he said.  

The German automakers strong presence at Beijing is a riposte after Chinese manufacturers dominated Germany’s annual auto show last year. Nevertheless, the locals will also be out in force this week. 

BYD will have 28 models on display across its mainline brand, Fang Cheng Bao luxury, Yangwang supercar and Denza lineups, and is anticipated to showcase its first electric pick-up truck. Geely Automobile Holdings Ltd.’s electric and hybrid Galaxy series will debut its flagship SUV, while EV maker Zeekr and Chery Auto’s premium Exeed brand will launch minivans, a segment that’s becoming popular with Chinese automakers due to the high margins they can make from the vehicles. 

All up, there will be 117 global car debuts, including 30 from foreign automakers, 41 concept cars and 278 electric and hybrid models featured, show organizers said on their WeChat account.

--With assistance from Gabrielle Coppola and Jinshan Hong.

©2024 Bloomberg L.P.