The arrival of new competitors in Europe
Europe is undergoing an industrial transition that is no longer just rumour: Chinese vehicle manufacturers are arriving—or expanding their presence—with truly impressive product offerings. Highly refined electric propulsion, increasingly mature software-hardware integration, competitive ADAS levels and rapid improvement in perceived quality and finishes. The smart interpretation is neither “threat” nor “miracle”. It is that they have demonstrated an extraordinary ability to iterate and execute.
But if the debate remains focused on the car we see at the dealership, we miss what determines sustained success in Europe: the operation. What happens every day on the factory floor when thousands of units have to be manufactured with consistency, evidence of quality, responsiveness and, above all, reliable traceability. And here lies a huge opportunity for improvement — and collaboration — that need not sound offensive: it is not about “teaching”, it is about accelerating operational maturity in an environment, the European one, where the bar for compliance and evidence is very high.
It is worth clarifying two concepts so that no one gets lost. When we talk about traceability, we are referring to the ability to reconstruct the ‘history’ of a vehicle: exactly which components were fitted, which batch they came from, who installed them and when, what checks were carried out and with what results, and what changes or rework was done. In non-engineering terms: it is like the car’s “medical history”, but written by the factory, and it serves to know precisely which units are affected if a problem arises.
And when we talk about VIN, we are talking about the vehicle identification number, a sort of unique “DNI”. It is the reference that allows us to associate each specific car with its actual configuration, its components and its production and after-sales history. Without that clean association (VIN ↔ components ↔ controls), the rest is guesswork.
Are Chinese manufacturers automating?
Before going into quality, it is worth debunking a myth: it is not true that China “does not automate”. If we measure industrial automation by a defensible indicator such as the installation of robots, the picture is stark. The International Federation of Robotics (IFR) reports that China installed 276,288 industrial robots in 2023, representing 51% of global demand, and reached an operational stock of 1,755,132 robots working in factories. This does not describe a country “starting” to automate; it describes a country automating at scale.
If we look at another standard metric, robot density (robots per 10,000 employees), IFR puts the global average at 162 in 2023. In other words, the automation of production processes is advancing rapidly, and China is in the top league. In 2014, it had a ratio of 34 robots per 10,000 employees, and in 2024 (just 10 years later) it will be 557 (third in the world). The conclusion is simple: in assembly and manufacturing, the important steps are already happening.
So where does the “journey” fit into operations? In a fairly universal reality in the automotive industry: assembly usually receives the “hard” investment first (robots, lines, tools, takt time) because it directly impacts throughput and unit cost. On the other hand, Quality usually comes later, because truly industrialising it is more complicated: it is not enough to manufacture; you have to demonstrate that you manufacture well, capture reliable evidence and close the improvement cycle with consistent data. To put it bluntly, quality usually lags behind the process… until the market and regulators force you to bring it up to speed.
And here Europe is a special environment, not only because of labour costs or customer expectations, but because today’s car is no longer “mechanics plus electronics”: it is a system governed by software. And this brings us to the third key concept: OTA. “Over-The-Air” means that the car can receive software updates remotely, without going to the garage, just like your mobile phone. It’s wonderful… as long as the system knows for sure what components the car has and what software is compatible with them.
Traceability as standard
With remote updates, traceability is no longer just “which part carries this VIN,” but also “which software, calibration, and firmware are compatible with the actual hardware installed in that vehicle.” Here comes a question that should make us uncomfortable (in a good way): Are we treating traceability as an audit procedure… or as a safety requirement in a software-defined vehicle?
If traceability depends mainly on operators scanning codes intensively, we are not talking about bad faith or lack of professionalism. We are talking about industrial statistics: fatigue, rushing, damaged codes, out-of-flow rework, unrecorded replacements, or friction-prone VIN-batch associations. The problem is not that there is a one-off error. The problem is that when the system relies too heavily on repetitive manual actions, errors may not leave a complete and auditable trail.
And when the vehicle receives software remotely, that error ceases to be a “quality issue”. It can become a serious operational risk: installing firmware or calibration that does not correspond to the actual hardware (sensor, ECU, component variant) can degrade system performance, cause diagnostic failures or, in the worst-case scenario, compromise ADAS functions. In this context, proper traceability is a requirement for compliance and safety: the car does what it does because the software believes the hardware to be what it is. If that belief is false, the factory has sown a silent problem.
This debate is also intersecting with a concept that the EU is pushing hard and that is on everyone’s lips: “Made in Europe” (and its political cousin, “Buy European”). The European Commission is proposing measures to give preference to strategic European industrial products in public procurement and to strengthen reindustrialization and strategic autonomy, with a special focus on sectors such as automotive and zero-emission technologies.(elpais.com) The underlying message is clear: manufacturing in Europe is not just a postal address; it is a promise of resilience, competitiveness and compliance.
And here another uncomfortable question arises: if “Made in Europe” is serious, what will actually be “European”: assembly, supply chain, traceability and evidence… or just the place where the screws are tightened?
This is the opportunity: Chinese manufacturers are already demonstrating excellence in product and a real acceleration in automation. The next leap is in manufacturing. a9> of manufacturing. The next step —especially in Europe— is to take that same ambition to the layer most sensitive: quality, traceability and digital evidence. Not as bureaucracy, but as a competitive advantage.
What will happen when Chinese manufacturers do everything optimally: product and process, innovation and consistency, brilliant software and impeccable traceability?
Are we competing against the car we see today… or against the car that will be manufactured tomorrow when learning is consolidated?
Where does Industry 4.0 come into this?
This is where Industry 4.0 fits in naturally, because it is not about making pretty checklists, but rather about converting them into actionable steps. “make nice checklists”, but rather to turn quality into a system. Digitise control guidelines so that they are not just dead PDFs, capture evidence at the point of operation, link results to VIN, batch and variant, manage non-conformities with a disciplined flow and reduce the weight of manual traceability “based on scans” when there are more robust alternatives available.
There is a strategic consequence that is often underestimated: in a world with OTAs, the factory does not finish when the car leaves the door. The factory “continues” inside the car for years, with every update. If the configuration and component data are not flawless, digital after-sales becomes a minefield.
Who will bear the actual cost of a traceability error in a connected car: the plant, the supplier, the software integrator… or the driver?
The conclusion is practical and, if you like, optimistic. Europe is raising the profile of reindustrialisation with the Made in Europe discourse, while the automotive industry is transforming itself into software on wheels. At this crossroads, product excellence is a necessary condition, but not sufficient. The difference will be made by operations capable of demonstrating with reliable data and robust traceability that each vehicle is exactly what the system believes it to be… and that each remote update goes where it should go.
About the author: Xavier Conesa
Xavier Conesa is the Chief Growth Officer at Kapture.io, a company specialising in the digitisation of data. in the digitisation of data through its QMS.
