The workshop sells the second car, not the showroom

A new brand does not fail in Europe on the first car. It fails on the second.

If you have been offered the mandate for a Chinese marque, or you are the manufacturer choosing between an importer and a subsidiary of your own, the decision does not turn on how many cars leave the showroom in year one. It turns on whether, in year three, the car can be diagnosed, the part is on a shelf within a day, and the warranty claim is paid by an entity that is still trading. This piece is about that second arrival, and about the questions that settle it before anybody signs.

The first car is sold on price. The second is sold on the three years in between.

The salesman sells the first car. The technician sells the second one.

The first sale is a product decision taken by a customer with no history with the brand: price, specification, finance, a test drive. Everything that decides the second sale happens after the keys change hands, and almost none of it happens in the showroom. The first service. The first fault. The first time a part is needed and is either there or is not. The first insurance repair. The first software update that does or does not arrive.

For the business holding the mandate the asymmetry is sharper still, because the two halves of the relationship do not pay equally. The trade has a name for the ratio: absorption, the share of a site's fixed costs covered by service, parts and body gross on their own. A mandate that never builds a parc never moves that number, whatever it does to the registration count. Looked at from the dealer's side of the P&L, it is the figure least visible in a launch presentation and the first one a bank asks about.

So a mandate for a brand with no parc is an unusual asset. It hands you the sale immediately and the thing that pays for the building only later, and only if the brand is still here to supply it.

A new brand arrives twice: first with volume, then with the official warranty

Watch any brand that has arrived somewhere new and you see two arrivals, months or years apart.

The first arrival is product. Cars reach the market by whatever route moves fastest: an independent importer, a parallel channel, a dealer group willing to take stock on its own book. Warranty, where it exists at all, is informal, and the importer covers it out of its own pocket, because the alternative is a customer with no recourse and a reputation that dies in the first winter. That arrangement can move real volume. What it cannot survive is a systemic fault.

The second arrival is infrastructure. A factory warranty the manufacturer stands behind, original parts held in a regional depot rather than shipped against each order, diagnostic and software tools licensed to the workshops, technicians certified on high voltage, and a claims process that actually pays. All of it costs money before it earns any, which is precisely why it comes second: it gets signed off once the parc justifies the investment.

The distance between the two arrivals is where most of the risk in a new mandate sits, and it is not visible in the number a brand announces. In November 2025 Maria Grazia Davino, BYD's regional managing director for Europe, said the company would end 2025 with 1,000 points of sale in Europe and double that during 2026 (Reuters, 17 November 2025). That is a real build, and a fast one. It is also a count of points of sale. The count that decides the second arrival is a different one: workshop bays certified for the brand, parts lines held in Europe rather than ordered from China, and tool licences that work on a Tuesday morning in a town nobody in the launch presentation has been to.

Where there is no friction the product walks in on its own, and you see that best outside Europe

Europe is a poor place to observe this mechanism, because Europe has friction everywhere: an installed parc, incumbent networks with contracts to defend, homologation, and an owner who expects a courtesy car. Strip the friction away and the product effect can be watched on its own, separated from the infrastructure effect.

Azerbaijan is close to a controlled version of that. Imported electric vehicles have been exempt from VAT since 2019, and customs duties on batteries and charging equipment were cut in 2022. Imports of hybrid and electric vehicles from China went from 4,636 units worth 154 million dollars in 2023 to 15,471 units worth 396 million in 2024 (Eurasianet). There was no European incumbent to displace and no legacy network whose margins had to be defended. Take the fiscal friction out of a category and whoever already holds the structural cost advantage wins it almost automatically, without needing to discount.

That part does not transfer to Europe, and it is not the useful part anyway. The useful part is the correction attached to it: a product effect that large tells you nothing about durability, because at that point in the sequence nobody has yet been asked to repair anything at scale.

The same small markets show the second arrival too, and there it is documented rather than inferred. In Georgia, Geely has been represented since 2023 by Tegeta Cars as sole authorised importer, supplying genuine parts and warranty servicing. GWM opened an official centre in Tbilisi in 2026 and puts the argument in its own words on its Georgian site: a factory warranty of up to five years, original spare parts, professional technical service, and, if something breaks, "the manufacturer itself is responsible for the service, damaged parts are replaced with authentic spare parts, the service history is preserved, and the car's value is higher on the secondary market".

That last clause is a manufacturer telling you, in its own marketing, that the second arrival is a residual value argument.

The day a factory warranty appears, the market splits in two

The intuitive reading is that the official channel replaces the informal one. It does not. It splits the market, and both halves keep trading.

On one side are buyers still optimising for the lowest entry price, on cars brought in outside the official route, carrying an informal warranty backed by whoever imported them. On the other are buyers paying more for a car with a factory warranty behind it, a documented service history, and parts the workshop can actually obtain. Same badge on the bonnet. Two products, two price ladders, and two different used markets three years later.

Whoever takes the mandate inherits both halves and gets paid for one. The cars that came in the other way arrive in your service bay anyway, because yours is the only workshop in the province with the tool. Their owners believe they are your customers. Their goodwill claims are argued at your counter. Their resale prices set the reference point against which the cars you sold properly are valued.

This is also where the argument about badges usually gets misread. Whoever signs for a fleet is not underwriting a flag: the country stamped on the compliance plate does not move what the vehicle is worth in 36 months. That is not the opposite of what this piece argues. It is the other half of it. Nationality is not the question. Infrastructure is. A dense workshop network, parts on a shelf and a certified used programme that gives the second owner a reason to bid move the residual. A European assembly address, on its own, does not.

Importer or subsidiary: the choice says how long the brand lasts, not how much it sells

Both routes sell cars. They differ in where the obligations sit when something goes wrong.

An importer buys speed. The brand rents an organisation that already has sites, technicians, a used operation and banking relationships, and it reaches the market a year or two earlier than it otherwise could. XPENG entered Italy through ATFlow, an importer created by the Autotorino dealer group, whose network points are sales and service locations at once. That is the argument for the route in a single line: the workshop exists before the first car is delivered.

A subsidiary buys control. The manufacturer owns the warranty promise, the parts chain and the tool licences, and carries the cost of all three from the first day, well before the parc is large enough to pay for them.

The route is not permanent, and that is the part which belongs in a contract rather than in a presentation. Wolk After Sales Experts, which tracks Chinese brands in the European aftermarket, describes exactly that churn: MG, Polestar and Lynk & Co leaned on heritage and on existing dealer networks, BYD started with large importers and has been moving towards smaller local partnerships, and NIO and XPENG have moved towards conventional dealer networks. A brand that changes route is not doing anything improper. It is doing what its plan always said it would do. But your contract is with the entity that exists today, and the second arrival was promised to you by that entity.

Whether the same manufacturer is also bringing capital to Europe is a separate question with a separate answer, and we take it apart on its own.

For a group that already has the signs, a new mandate is an investment in the workshop before the showroom

Read the mandate as a capital request and its shape changes. The showroom side is cosmetic and quick: corporate identity, signage, a display area, sales training. The workshop side is neither. Bays and lifts, high voltage certification for technicians who then have to be paid while the parc is too small to keep them busy, a diagnostic and software tool licence, and an opening parts stock that will sit on a shelf for eighteen months earning nothing.

All of it is financed against a parc that does not exist yet, for a brand whose second arrival is a plan rather than a history.

The trade has already formed a view on that, and it has grown more cautious as the brands have grown larger, not less. In a survey of German workshops and dealers presented by Wolk After Sales Experts at AMR in March 2025, 25% said they were willing to work with Chinese brands, against 38% in 2023.

Read that the way a mandate committee should. The people closest to the repair are the ones whose willingness fell, over a period in which those brands were expanding rather than retreating. The gap is either an opportunity, if you conclude the trade has mispriced it, or it is the market's honest estimate of what the second arrival is worth today. Either answer is defensible. Signing without forming one is not.

Whether a new mandate is the right use of the balance sheet at all sits next to a different question, about whether the business is still yours while the value is at its highest. Those are two decisions, and they should not be taken in the same meeting.

The question to ask the manufacturer before signing is not about volumes

Volume forecasts are the part of a launch presentation everybody argues about and nobody can settle. Four other questions can be settled, on paper, before signature.

Who pays a warranty claim, and out of which balance sheet. Not which entity administers it. Which one is legally liable, and what becomes of that liability if the European entity stops trading.

Where the parts sit, and what happens when they do not. A regional depot, a committed fill rate, and a remedy when it is missed. A parts promise with no penalty attached is a forecast, not a term.

Who holds the diagnostic and software tool licence, and whether it survives a change of importer. This is the question that gets skipped, and it is the one that strands a workshop.

What happens to your mandate if the brand switches route. Continuity, compensation, or a re-tender.

The third one is not hypothetical. Aiways, which sold cars in several European markets, states on its own European support pages that from 1 November 2025 warranty processing would no longer be handled exclusively through A.T.U., that A.T.U. and other qualified workshops could carry out warranty repairs, and that Aiways China "at present has not been able to provide the IT tools to ATU or other workshops" needed for that work, while Aiways Europe continues to coordinate spare parts supply with China. A manufacturer can intend to honour every claim and still leave the workshop unable to open the file. Intent was never the variable. Access to the tool was.

None of those four questions needs a consultant to ask. What they need is the base rebuilt from sources rather than from the presentation: what the parc in your territory will realistically be in three years, what it costs to serve it properly, and what the mandate is worth if the second arrival runs a year late. That is one question, commissioned on its own, and it costs less than the opening parts stock.

A brand that arrives once is a supplier. A brand that arrives twice is something you can underwrite a ten year lease against. Either way the mandate itself is an asset, and awarding one is the cheap alternative to buying the group that already holds it. The mandate in front of you is priced on the first arrival. What it turns out to be worth is decided by the second, and by whether the manufacturer has written down a date for it, or only a number.