Search CarGuide.PH

July 9, 2023

Chinese Car Brands To Take Majority Of Home Market For First Time

Thanks to a shift towards electric vehicles, Chinese carmakers are continuing their advance even in their home country as they close in on 50 percent of total new car sales over there. This is according to automotive consultancy company, AlixPartners.

For the past four decades, China’s auto market has been dominated by established global brands such as VW and Toyota operating in joint ventures with Chinese partners. But competitive pricing, faster rollouts of new models, and the rise of domestic electric carmakers like BYD, Nio, and Xpeng Motors have changed the dynamic for made-in-China auto brands.

It would represent the first time Chinese automakers have controlled a majority share of China’s car market—the world’s largest.

AlixPartners forecast China’s overall auto sales would grow 3 percent this year to 24.9 million vehicles, recovering to the level of sales before COVID-19. It forecast growth to 30.6 million vehicles in 2030, when it projected more than half of vehicles sold in China would be EVs.

China’s market for what it calls “new energy vehicles” (NEVs), including plug-in hybrids and pure electrics, has benefited from the equivalent of USD 57 billion in subsidies from the government during 2016 to 2022, the consultancy said.

The shift towards EVs aside, Chinese EV makers have also gained ground because they’ve focused on features such as advanced driver assistance systems (ADAS) even on cheaper cars.

That competitiveness will make Chinese automakers as disruptive to established global automakers in coming years as Tesla has been, said Stephen Dyer, who heads AlixPartners automotive consulting in Asia.

“It would be the best for foreign brands to learn from new Chinese EV startups if they want to survive in China or face the disruptive impact from those brands in their home markets,” Dyer said at a briefing.

Dyer forecast annual sales of Chinese-branded cars in overseas markets would grow to 9 million vehicles by 2030. That would give Chinese brands 30 percent of global share and a market share of 15 percent in Europe, 19 percent in South America and 19 percent in South East Asia and South Asia.

China’s market also faces massive overcapacity, and Dyer forecast a wave of consolidation. Only 25 to 30 out of the 167 NEV brands can survive by 2030, Dyer said. Over two-thirds of those brands haven’t recorded any sales last year, he said.

“Even with best-in-class operations, it takes up to 400,000 units of annual production to reach breakeven,” he said.

1 comment:

  1. Good to know the Chinese are supporting their own carmakers.


Feel free to comment or share your views. Comments that are derogatory and/or spam will not be tolerated. We reserve the right to moderate and/or remove comments.