With nearly 1,000 exhibitors present, foreign carmakers are raring to show they can keep pace with the ultra-competitive Chinese firms that dominate the sector's electric frontier.

Vying to shore up sliding sales in a market they used to dominate, German companies on Wednesday pitched themselves as building cars "in China for China".

Volkswagen, the largest foreign group operating in the country, unveiled a series of new electric vehicles and a driver assistance system developed especially for the Chinese digital ecosystem.

The group says it will launch more than 20 electric and hybrid models for the country by 2027.

At the BMW booth, a foreign executive conducted a conversation in Mandarin with an AI assistant, before CEO Oliver Zipse rolled onstage in a futuristic white SUV from the upcoming "Neue Klasse" series.

A separate version specifically tailored for China will be launched next year.

"At BMW we will continue to advocate for... open markets," Zipse said, adding that "global challenges require global cooperation" in an apparent reference to the current trade turmoil set in motion by the Trump administration.

- Cutthroat competition -

Foreign brands are up against cutthroat competition from dozens of local rivals.

Beijing's historic backing of EV and hybrid development has seen the domestic market flourish, with analysts considering it younger-leaning and more open to novelty.

Auto Shanghai, which runs until May 2, has seen a flurry of launches.

Huge crowds gathered at domestic champion BYD's booth as it unveiled five new Ocean series cars, as well as a luxury SUV under its sub-brand Yangwang, and a concept sports car under another, Denza.

BYD has enjoyed a giddy few months of surging sales after annual revenue surged in 2024, eclipsing rival US titan Tesla -- which is not present at the show.

Others exhibiting range from state-owned behemoths, start-ups such as Nio and Xpeng, tech giants with skin in the game such as Huawei, and consumer electronics-turned-car company Xiaomi.

The domestic contest has pushed Chinese companies to develop faster and fostered technological innovation.

On Wednesday, Nio CEO William Li presented the flagship ET9, powered by two proprietary smart driving chips.

Xpeng unveiled AI battery technology it said would deliver a 420-kilometre (260-mile) range in just 10 minutes, the latest in a slew of recent fast charging announcements from BYD and battery giant CATL.

However, the effect of the crowded market on individual companies can be harsh -- some start-ups have already gone bust, while brands including SAIC Motor, BYD and Geely are engaged in a brutal price war.

"The sector is very competitive and not everyone here will survive," Xpeng's president Brian Gu told AFP on Wednesday.

Many Chinese automakers have looked to grow their overseas sales in markets such as Europe, Latin America and Southeast Asia to safeguard their future.

Last year, China exported 6.4 million passenger vehicles, more than 50 percent above second-ranked Japan, according to consultancy AlixPartners.

There are still potential roadblocks though.

Nio on Tuesday said it had underestimated the difficulties of expanding into Europe, blaming logistical hurdles and noting tariffs would have an impact on price competitiveness.

- Tricky tariff terrain -

Tariffs will also be on the minds of foreign companies who make cars in China themselves, such as the United States' General Motors and Ford.

Beijing and Washington are at an impasse after President Donald Trump's tariff policy triggered a tit-for-tat escalation between the two superpowers, leading to staggeringly high reciprocal levies.

Since last year, Chinese carmakers have also faced extra duties from the European Union.

However, exports to Russia and the Middle East have helped cushion these and other tariff impacts, AlixPartners said Tuesday.

And although the levies will increase the cost of China's vehicle component exports by about 24 percent, "this represents only about 3.8 percent of China's total auto industry production value", it noted.

Other speedbumps are internal.

China's post-pandemic recovery has wobbled, with low domestic consumption a persistent issue, while concerns have been raised about overcapacity.

tsz-reb/dan

Volkswagen

BAYERISCHE MOTOREN WERKE AG

Xiaomi

SAIC MOTOR

BYD COMPANY

Geely

General Motors

FORD MOTOR