South Korea’s Kia Corporation has moved to narrow the price gap between its vehicles and those of Chinese competitors in Europe, a step that signals the emergence of a price war in one of the world’s most competitive automotive markets.

According to CEO Song Ho-sung, the company has reduced the difference in pricing to around 15–20 per cent this year, down from 20–25 per cent previously, depending on the market. The strategy is aimed at strengthening Kia’s position as Chinese electric vehicle makers accelerate their expansion into Europe.

The shift appears to be yielding results. Together with Hyundai Motor Company, Kia ranks among the world’s top three automakers by sales and has managed to grow global revenue despite a broader slowdown in the automotive sector.

Europe has become a key battleground for legacy carmakers and Chinese EV manufacturers such as BYD. Chinese brands are pushing aggressively into overseas markets as demand weakens at home and access to the United States remains limited.

The impact is already visible in sales data. Registrations of BYD vehicles in Europe surged by nearly 150 per cent in March, significantly outpacing the overall market growth of 11 per cent and the roughly 6 per cent increase recorded by Kia and Hyundai.

This rapid expansion has forced established automakers to respond with price cuts and more affordable models. Kia has leaned on its profitability to remain competitive, although the company recently reported a decline in quarterly profit, partly due to increased incentives offered in Europe.

Company executives acknowledged that Chinese manufacturers are gaining market share faster than expected in several European countries, driven largely by competitively priced electric models.

Looking ahead, Song suggested that structural changes in China’s automotive sector may come sooner than anticipated. As Beijing shifts its strategic focus toward industries such as artificial intelligence and robotics, government support for electric vehicle makers could be reduced.

‘Chinese manufacturers are gaining market share faster than expected in several European countries’

This follows signals from Chinese authorities that subsidies for the EV sector may be scaled back after years of rapid expansion that have led to oversupply in the domestic market. The prospect of reduced state support could weaken Chinese automakers’ ability to sustain their aggressive international push.

Despite this, competition is expected to remain intense in the near term. Kia and Hyundai executives have stressed that while they may not match the pace of Chinese rivals’ growth, they are focused on maintaining profitability without relying on government backing.

China’s car market, meanwhile, is under pressure, with sales falling by 18 per cent in the first quarter compared with a year earlier. Analysts expect demand to remain flat or decline further in the coming period, reinforcing the importance of overseas markets for Chinese manufacturers.

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