• Incumbent OEMs renew efforts in China through collaboration and localization.
• Chinese consumer car owners shifting towards innovative tech and user experiences.
• Chinese automakers display high levels of innovation but struggle to make profits.

Auto Shanghai 2025 revealed a pivotal shift in the global automotive landscape, with China emerging not only as the world’s largest car market but also as a crucible for innovation in in-vehicle user experience (UX).

Our recent report explores the dynamic efforts of incumbent global OEMs, innovation-led strategies of Chinese automakers, and the evolving expectations of Chinese car buyers—all of which are reshaping the industry.

Incumbent auto OEMs such as Mercedes-Benz, Audi, Volkswagen, and BMW are intensifying their localization efforts in China through partnerships with local tech players and by developing China-specific models and services. These include AI-powered assistants, immersive digital entertainment, and software-defined platforms—marking a clear shift from hardware-driven selling points to personalized, tech-centric UX.

At the same time, Chinese automakers like BYD, Li Auto, and NIO are pushing the boundaries of innovation, offering immersive in-cabin experiences, pillar-to-pillar displays, Dolby-powered entertainment, and AI-enhanced interfaces. Despite this, many struggle with profitability amid intense competition and thin margins, often maintaining multiple brands that dilute focus.

Chinese consumers are at the heart of this transformation. Significantly more tech-forward than their Western counterparts, purchasing decisions are increasingly driven by infotainment and digital features over traditional metrics like price or performance. Their preferences are influencing not just the Chinese market but also global design and technology strategies.

Tech Affinity of Car Owners

Source: Counterpoint Research Automotive Consumer Survey, Q1 2025; Total N=4064.

Auto Shanghai 2025 reflects how ultimately, the winners will be Chinese car owners. The fierce competition among local and global automakers ensures access to cutting-edge innovation, deeply personalized UX, and competitive pricing. As China sets the pace for automotive experience innovation, global players must not just to stay relevant in China, but keep up with a rapidly evolving global consumer mindset.

Auto Shanghai 2025 is Asia’s biggest automotive show and is not just a stage for local players anymore but is increasingly relevant worldwide. Counterpoint investigates its impact, looking at the effort of incumbent OEMs in China as well as Chinese automakers and consumer trends and their impact on the industry locally and globally.

Access to the full report here
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