Global Scaling and Beyond: Insights from European Expansion of Chinese Automotive Firms

Abstract:

Global Scaling and Beyond:
Insights from European Expansion of Chinese Automotive Firms

Track 3: New Technologies and the Evolution of the Value Chain
Lukas Lau, Arne Jeppe, Heike Proff

As non-Western multinational enterprises expand into advanced economies at increasing speed and scale, their internationalization strategies have become a central topic in international business research (Alon et al., 2011; Zámborský et al., 2023). Chinese automotive firms, particularly those active in the New Energy Vehicle (NEV) sector, represent a rapidly expanding group of multinational companies whose growth increasingly challenges established assumptions about internationalization and global competition (Teece, 2019; Hou & Wang, 2024). In recent years, Chinese automotive manufacturers have increasingly entered European markets, one of the most technologically advanced and institutionally demanding automotive environments worldwide (GlobalData, 2025; KPMG, 2025). While international business research has traditionally focused on multinational enterprises from advanced economies (Hertenstein & Alon, 2022; Ramamurti & Williamson, 2019), the internationalization behavior of emerging-market firms in advanced markets remains only partially understood (Narula, 2012; Luo & Tung, 2018). In particular, it remains unclear how Chinese automotive firms reconcile the logic of global scaling with the regulatory, institutional, and competitive conditions of mature markets such as Europe (Verbeke & Kano, 2016; Rugman & Verbeke, 2003).
Against this background, this study addresses the following research question: How do Chinese automotive manufacturers adapt their internationalization strategies as they expand into European markets?
To examine this question, the paper analyses the European expansion of Chinese automotive manufacturers through the lens of global scaling (Reuber et al., 2021). Global scaling describes a logic of multinationalization that emphasizes rapid international growth through the replication of standardized business models across foreign markets. However, the applicability of this concept to capital-intensive manufacturing industries such as automotive production remains theoretically underexplored.
Empirically, the study employs a mixed-methods research design combining qualitative and quantitative data sources. First, a qualitative content analysis of annual reports and strategic documents between 2020 and 2024 is conducted to reconstruct the business models of nine Chinese automotive manufacturers using the Business Model Canvas as an analytical framework (Osterwalder & Pigneur, 2010). Second, expert interviews with industry specialists, managers, and analysts are conducted to validate and refine the findings derived from the document analysis, enabling methodological triangulation across different data sources (Eisenhardt, 1989).
The analysis indicates that Chinese automotive OEMs initially internationalize by replicating business model configurations developed in their domestic market, which is broadly consistent with the logic of global scaling that emphasizes the international replication of standardized business models across foreign markets (Reuber et al., 2021). This pattern is also consistent with prior research highlighting how Chinese automotive firms build capabilities and scalable business model architectures within their domestic ecosystem before expanding internationally (Teece, 2019; Deng, 2013; Hertenstein & Alon, 2022). However, the analysis also reveals systematic adjustments of specific business model components as firms expand into Europe.
The study contributes to International Business research by examining the applicability of the global scaling perspective to the international expansion of Chinese automotive manufacturers. While the concept emphasizes the replication of standardized business models across foreign markets (Reuber et al., 2021), the empirical findings highlight the limits of applying this framework to capital-intensive manufacturing industries characterized by complex supply chains, regulatory heterogeneity, and institutionally embedded capabilities. In such contexts, international expansion involves a more complex interaction between domestically embedded capabilities and heterogeneous institutional environments (Alon et al., 2011; Deng, 2013; Hertenstein & Alon, 2022).
From a practical perspective, the results provide insights for policymakers, industry stakeholders, and established automotive manufacturers seeking to understand the competitive dynamics created by the rapid global expansion of Chinese New Energy Vehicle firms.