After I published the article, many self-proclaimed luxury and car experts told me that there will be never a successful Chinese car brand with appeal outside China, even less in the luxury space. Some said that only European car companies could ever be successful in the premium and luxury segment. I am not so sure about these statements. It may take some time, but indicators point in another direction.

Nio, for example, is to me one of the most interesting disrupters to watch. The Nio House concept set a new benchmark for the car retail experience, easily surpassing the experiences of most European premium or luxury car brands. It is an experience that puts the customer in the centre, not being the transactional exchange that is the case with so many traditional car makers.

Another of Nio’s innovations is Nomi, a user interface with a voice-controlled assistant complete with a “face” that mimics human facial expressions and is even able to take a selfie upon command. After experiencing it myself in Shanghai, I thought it was a game changer. I would have expected brands like Bentley or Rolls-Royce to come up with such a “butler” feature, not a newcomer like Nio.

These proprietary services are a huge source of competitive advantage as they allow a permanent interaction with customers. Apple has proven that platform business models are the most successful and profitable and allow for continuous customer dialogue. Traditional car companies have not yet been able to build such platforms as they focus on the car sale and its financing, then the service and repair interactions as drivers of revenue. The soaring valuations of Tesla, with their proprietary Supercharging network, and Nio, with its battery swapping approach, show how valuable platform models can be.

This week’s Auto Shanghai show should make Western car brands even more nervous as China’s car brands are “on the charge”, so to speak, given the multitude of new electric cars shown.

China’s Gen Zers – those customers under 25 this year – and young millennials are showing the greatest propensity for local brands. These consumers are the most digital ever, the most affluent customer group to ever enter China’s car market, and they are increasingly patriotic and proud to buy Chinese. As in other categories, Gen Z will disrupt the car industry and Western brands will need to up their game fast as the speed of change is unprecedented.

Arcfox’ Alpha S boasts an AI-powered operating system – HarmonyOS – that promises to transform the in-car experience, including the using of the windscreen as a massive screen. Geely, one of the shareholders in Mercedes-Benz, launched its Zeekr electric brand, also playing up the smart technology experience for younger customers.

Technology shifts always create opportunities for new brands. Given that young Chinese consumers are massive users of local social media and gaming sites, the shift towards technologically advanced car companies who understand them better than foreign companies seems logical.

Previously, Western car brands were strong on internal combustion engine design and driving comfort. Their brand equities were fuelled by these traditional values of the industry. Digital expertise and digital user experiences is a weak spot for practically all the legacy brands. While Mercedes is trying to set a new in-car entertainment standard with its Mercedes EQS, Chinese companies have a window of opportunity to attract young customers in China and beyond with business models that cater more to their preferences and digital lifestyles than many Western brands may be able to.

Extreme value creation in the car industry is moving from engines to entertainment and from comfort to a more holistic customer-centric model. And the preferences of Gen Z are driving the change. Exciting times for innovative brands.