Still discreet on Luxembourg’s roads, Chinese brands are gaining ground. Their progress, slower than elsewhere in Europe, comes against a tense trade backdrop between Brussels and Beijing.
According to the available figures*, over the first five months of 2026 Chinese brands recorded a total of 831 new-car registrations in the Grand Duchy, or 4.1% of the market, against 2.7% across the whole of 2025. The increase is clear, but the share remains limited. The landscape has, above all, become more diverse. The Chery group, through its Omoda and Jaecoo brands (304 registrations combined), now overtakes MG (200), long the country’s leading Chinese brand. Next come BYD (135), followed by a string of newcomers such as Xpeng, Forthing, Leapmotor and BAIC. The case of MG is worth highlighting: historically the leader, the brand fell back in 2025, dropping from 664 to 326 registrations over the year, before recovering in early 2026.
Chinese brands (January to May 2026)
| Brand | Reg. | Share |
| MG | 200 | 0.98% |
| Omoda | 153 | 0.75% |
| Jaecoo | 151 | 0.74% |
| BYD | 135 | 0.66% |
| Xpeng | 59 | 0.29% |
| Forthing | 51 | 0.25% |
| Leapmotor | 35 | 0.17% |
| BAIC | 31 | 0.15% |
Chinese brands, excluding European brands under Chinese ownership (Volvo, Polestar). Total: 831 cars, or 4.1% of the market. Source: SNCA, own calculations.
A European market shifting faster
The comparison with the European market is telling. Between January and April 2026, Chinese brands accounted for around 6% of registrations in the European Union, against 3.2% a year earlier, and almost 7.3% across wider Europe, including the United Kingdom and the EFTA countries. Their share has therefore doubled in a year.
But this progress is not uniform among the Chinese manufacturers. Over these four months, BYD’s registrations more than doubled in the Union, those of the Chery group rose by 267% and those of Leapmotor, distributed through its joint venture with Stellantis, increased more than sixfold, while SAIC, the owner of MG, gained only 10%. With its 4.1%, Luxembourg lags the European average by around a year.
Why is Luxembourg holding out?
Several factors explain this inertia. The Luxembourg market is dominated by German premium brands and remains heavily shaped by company fleets and leasing. Yet, across the Union, company fleets account for around 60% of new-car registrations and often enjoy favourable tax treatment. These channels favour established brands, whose resale value is better known and whose service networks are already in place. Added to this is buyers’ caution towards recent brands, whose depreciation remains hard to anticipate.
This caution is borne out on the used-car market. Deutsche Automobil Treuhand (DAT), the benchmark for vehicle valuation in Germany, recently analysed the residual value of Chinese electric and plug-in hybrid models. The finding is clear: between the start of 2024 and April 2026, their average residual value fell from 61% to 47.2% of the new price, a drop of 14 points. Over the same period, the market as a whole, for these same powertrains, gave up only seven points. Chinese brands therefore lost value about twice as fast as the average.
Several factors explain this decline. When they first arrived, Chinese models held good residual values, supported by a limited range and sometimes unusual models. The proliferation of more interchangeable vehicles then weighed on prices. Added to this are used-car buyers’ doubts about the longevity of certain brands, about the service network and about parts availability, along with a fast rate of model renewal that makes models look outdated sooner. The lack of hindsight on the quality of the oldest vehicles also comes into play.
This gap weighs first on the leasing companies. According to DAT, some leasing firms are now more cautious and sometimes ask for compensation before adding a Chinese model to their range.
Customs duties and the hybrid pivot
The trajectory of Chinese brands in Europe is inseparable from the trade dossier. Since the autumn of 2024, the Union has applied to electric cars imported from China countervailing duties of between around 17 and 35%, on top of the usual 10% customs duty. After lengthy negotiations, a compromise was reached: on 12 January 2026, the Commission published a framework based on a minimum price, intended to offer Chinese manufacturers an alternative to the duties.
Above all, since these duties target only fully electric vehicles, Chinese manufacturers have reshaped their offering. Their exports of hybrid models to the Union jumped by 155% in 2025, while those of electric cars, already taxed, rose by only 12%. The Commission is now examining whether to extend these duties to hybrids.
Producing in Europe to get around the barriers
To escape the customs duties, which hit only imported vehicles, and to get ahead of future local-content rules, several Chinese manufacturers are now investing in European plants. Spain is establishing itself as the favoured point of entry.
The Chery group is the most advanced there. In partnership with the Spanish manufacturer Ebro within a joint venture, it already assembles vehicles at the former Nissan plant in Barcelona and plans to produce its own models there from late 2026 or early 2027, for a volume that could reach 30,000 cars. For its part, Leapmotor, which operates through its joint venture with Stellantis, is to launch production of two models in Spain, and Stellantis plans to transfer its Madrid plant at Villaverde to this joint venture, where several Leapmotors will be built. Geely, finally, is reported to have taken a stake in the Ford plant in Valencia to produce its own crossovers there.
The only site built from scratch remains BYD’s. To date the only entirely new plant of a Chinese manufacturer in the Union, it is located in Szeged, Hungary, and is due to start production during 2026. The manufacturer is clear about its ambition to become a fully fledged European producer.
France, more cautious, hosts no confirmed Chinese plant for the time being. The trend could nonetheless spread there: Stellantis is reported to be considering selling some of its French, German and Italian sites to the Chinese group Dongfeng. The dominant model is therefore not so much building new plants as taking over underused European sites, a quick solution for manufacturers in a hurry to establish themselves.
What to watch
The question is no longer whether Chinese brands will establish themselves in Luxembourg, but at what pace. The arrival of new models, often hybrids to get around the European customs duties, and the ramping up of distribution networks point to a rising market share in the coming years. It remains to be seen whether they will manage to break into the fleet market, the real lock on the Luxembourg market.
