LONDON, May 30 (Reuters) - Starting in the 1980s,

European automakers steadily conquered China, racking up

millions in sales with little local competition.

Now they'll have to defend their home turf in Europe from an

onslaught of formidable Chinese electric vehicles.

Chinese EV titans BYD, Chery and

Great Wall Motor (GWM) are preparing a fusillade of

product launches - about 20 over the next five years - and

spending heavily on sales and marketing in their most important

export market, according to Reuters interviews with 18 China

auto executives, consultants and industry experts familiar with

the Chinese automakers' European strategy.

After several years of swiping market share from foreign

rivals in its domestic market, the world's largest, China's

increasingly potent EV industry is ready to take the fight to

Europe.

Chinese electric-vehicle makers have studied European

car-buyers for years, hiring industry veterans and selecting

distributors with extensive local knowledge as they laid the

groundwork to take on Tesla and legacy automakers, the sources

said. BYD and Chery have already announced plans to manufacture

cars in Europe.

Chinese carmakers are now deploying a range of tactics

to break into the market, ranging from sponsoring high-profile

sporting events to raise awareness of their brands, to building

out their dealership networks, and shoring up service-and-repair

operations to protect resale values - a key requirement of fleet

buyers who make up a large share of the European market.

Chinese automakers' European sales remain small because

their brands are little-known to consumers - with the exception

of MG, a former British brand owned by SAIC, a

state-owned Chinese automaker.

But deliveries are growing rapidly and could surge with the

release of additional models across a broad range of price

segments, industry experts said. BYD saw its Europe sales triple

to 15,000 vehicles in 2023 after years of exponential EV sales

growth in China and other export markets.

BYD has launched six electric models in Europe and a

spokesman said the company is rolling them out across 20

countries. It launched its first three models in the United

Kingdom last year and plans two more this year, said BYD's UK

marketing manager, Mark Blundell.

Great Wall plans to launch a model a year in Europe for

the next five years, two distributors told Reuters. Chery will

launch a total of eight SUV models under two brands, Omodo and

Jaecoo, over the next two years, said Chery's European managing

director, Jochen Tueting.

By comparison, Tesla has just two volume-sellers - the

mid-priced models 3 and Y. Both are overdue for a redesign and

declining in global and European sales.

Executives from BYD, GWM and Chery told Reuters they are

looking to plant deep roots in the Europe market. Chery's

Tueting said the company is focusing on all facets of the

European automotive ecosystem, from branding to financing tools

to repairs and resale values for both private and corporate

customers.

"We've been doing our homework," Tueting said.

SAIC's MG did not respond to interview requests.

Christina Bu, of the Norwegian EV Association, which

represents 120,000 EV owners, has met with many Chinese

automakers and noted some have spent years planning their

European strategy. Norway is a global leader in EV adoption.

Chinese brands, Bu said, have so far adapted Chinese EV

models for export, but they're already working on models

designed from scratch to target European buyers. They also don't

face the same pressure as western rivals to turn a profit

quickly because they are heavily backed by the Chinese

government, she said.

"Some of these players have spent a lot of money on it,

despite not having sold much yet," Bu said.

COST ADVANTAGES

China's auto industry, a mix of state-owned and private

firms, has major cost advantages over foreign competitors in

part because of government subsidies and the nation's dominance

of battery-minerals refining.

In China, the explosion of EV brands has ignited a price

war, with automakers led by BYD selling a slew of EVs priced

between $10,000 and $30,000.

Those rock-bottom prices have alarmed automakers and their

political allies in the United States and Europe. In May, U.S.

President Joe Biden quadrupled tariffs on Chinese EVs to 100%.

The European Union is currently investigating China subsidies

and may soon raise tariffs on its cars.

But European auto executives

said at a Reuters event in May

that higher tariffs will do little to protect them from

Chinese EVs unless Europe's industry acts quickly to match their

price and value.

"The window is closing," said Volkswagen (VOWG_p.DE)

board member Thomas Schmall. "We have two or three years."

So far, China automakers are not deeply undercutting foreign

rivals. Instead, they're maximizing profits on exports by

charging double or more, compared to the China price, for the

same vehicles.

Their Europe prices are just slightly below comparable

models from western automakers, but the Chinese vehicles are

often stuffed with standard-equipment goodies - such as

heated-and-cooled seats, 360-degree cameras, digital dashboards

- that often cost extra in competitors' vehicles.

Japanese automakers used similar tactics when expanding into

western markets decades ago.

LONG-TERM INVESTING

As they expand exports, Chinese automakers are implementing

complex strategies to increase their appeal to European

customers.

They have improved their safety ratings, they've

strengthened repair-and-service operations and distribution,

bolstering resale values, which are particularly important for

people who lease cars.

Leasing companies charge lower monthly payments for cars

with high resale value because they're worth more at the end of

the lease term, when buyers can choose to either buy them or

return them to the leasing firm.

Chinese EV makers' attention to detail reflects what

they've learned about European consumers, said Bo Yu, Greater

China country manager for JATO Dynamics, a UK-based automotive

industry research firm.

"In China, the purchase price is important," she said. "But

for European consumers it's not just price, but total cost of

ownership, including maintenance, service and residual values."

Ben Townsend, head of automotive at insurance

industry-funded safety group Thatcham Research, has been working

for the past year with Chinese automakers.

Beyond the obvious moves, like complying with safety

regulations and winning high safety ratings, Townsend said, the

Chinese exporters are delving into far more complex questions of

how to structure warranties and price repairs in Europe, which

has much higher service labor costs than China.

"There are hard rules on issues like safety that are clear,

and then there are soft rules that aren't written down,"

Townsend said. "The Chinese are very eager to learn the soft

rules."

The Chinese players are taking a comprehensive look at what

constitutes long-term success in Europe, said Toby Marshall,

managing director at vehicle distributor IM Group, who manages

GWM's ORA brand in the UK.

IM Group has previously launched a slew of new brands in

Britain, including South Korea's Hyundai and Japan's Subaru.

"Selling the car is just the tip of the iceberg," he said.

"There is so much more to understand about keeping that car on

the road throughout its lifetime."

Ensuring ready access to affordable spare parts is vital.

Marshall said GWM's UK ORA distributor can provide most parts

within 24 hours. And SAIC's MG has said it will open a second

European parts center this summer to support growing vehicle

demand.

Another critical effort is courting fleet consumers, which

control an unusually large share of European auto sales. For

instance, Ayvens, Europe's largest leasing company,

already has partnerships with BYD and Geely.

Unlike Tesla, which has undercut its resale values

by repeatedly reducing retail prices, Chinese automakers are

working with companies like Autovista, which conducts extensive

"car-to-market" studies to set optimal residual values for

leasing customers.

'B-Y-WHO?'

Chinese automakers' main challenge is reaching the majority

of European consumers who don't know they exist. That gives

legacy carmakers more time to stave off the threat of Chinese

exports, said Phil Dunne, a managing director at strategy

consultancy Stax.

"But the Chinese are fast learners," he said, "so it won't

last much longer."

To boost their brand presence, Chinese automakers are

turning to social media, high-profile event sponsorships and

partnerships with established dealer networks.

One of BYD's distributors in Italy is Gruppo Autotorino,

with 70 retail locations in 24 provinces.

"Our network allows them to reach clients quickly," said

chairman Plinio Vanini. "This was key for BYD."

GWM and Chery are partnering with existing dealerships that

also sell other established brands. Chery's European managing

director Jochen Tueting said the automaker, for its Omoda

vehicles, chose such shared locations "so people say: 'While I'm

here, I'll take a look.'"

BYD, because of its scale as China's leading EV brand, is

launching mostly standalone dealerships - and rolling them out

fast.

Mark Blundell, BYD's UK marketing manager, says the

automaker will have 60 UK dealerships by the summer, rising to

100 next summer, and within 18 months plans enough locations so

most Brits can reach one within a 14-minute drive.

Awareness of Chinese cars is rising. According to research

in March from online car marketplace Carwow, 50% of respondents

in Germany said they would consider a Chinese-made car, up from

27% last October.

To boost its brand, deep-pocketed BYD is spending big on a

sponsorship of the Euro 2024 soccer championship, a spot

previously occupied by Volkswagen.

BYD will showcase its EVs at match venues and get its

branding on live broadcasts. Each match drew more than 100

million viewers during Euro 2020, according to the Union of

European Football Associations.

"That will be great for familiarity because people will see

'BYD, BYD, BYD' all through the tournament," said Blundell, the

automaker's UK marketing manager. "But we're very humble about

it. Even this time next year, there will be people going

'B-Y-who?'"