On July 4, 2024, BYD photographed electric vehicles at Southeast Asia’s first electric vehicle (EV) factory in Rayong, Thailand.
Charlene Tirasupa | Reuters
BEIJING – Time is running out for traditional foreign automakers to adapt to China’s electric vehicle market, signaling to industry analysts that companies must redouble their efforts to build local partnerships to survive.
Fossil fuel-based automakers have struggled to gain a foothold in the world’s largest auto market. rapid change Becoming one of the current proportions of new energy vehicles More than half of all cars sold nationwide.
If foreign brands “cannot launch competitive clean energy vehicles in the Chinese market soon, the only hope to save market share may be through cooperation with domestic companies,” said Tu Le, founder and managing director of Sino Auto Insights.
“But is it too little too late? Maybe for some foreign brands,” he said.
american automaker General MotorsGerman Volkswagen and Japanese Nissan Both companies’ China revenue fell between 2019 and 2023, according to CNBC calculations of company data.
2023, South Korea hurry up Reported sales in China More than 30% lower than 2020 levels. Tesla In comparison, sales in China surged more than sixfold between 2019 and 2023.
as Investor concerns intensifymanagement is reviewing plans. GM Chief Executive Mary Barra said on an earnings call last month that the company held meetings with shareholders and joint venture board members to discuss “restructuring” to boost profits in China, Once GM’s highest-grossing market.
Beijing requires U.S., German and other foreign automakers that entered China decades ago to form joint ventures with local, often state-owned, companies.
It will not be until 2022 that the Chinese authorities allow Foreign car companies fully own their local production rights. But it’s a lucrative market, dominated by General Motors and Volkswagen. As of 2022, ranking the top two in terms of market share.
BYD of China and auspicious Since then, their sales have continued to rise, consolidating their first and second positions in the market respectively, according to October data from the China Passenger Car Association.
“Western (automakers) are waking up to the fact that they can’t just sit back and watch their market position continue to be eroded, they have to do something, they have to do something big,” said Hong Kong automaker David Norman. )express.
Last year, he represented Netherlands-based Stellantis in its acquisition of a company for about $1.59 billion. 20% stake in Zero Sports Car.
“To clear the crystal ball, I think we’re definitely going to see more collaboration,” Norman said. “The technological leadership of China’s new energy vehicle companies is huge and continues to grow.”
Chinese electric vehicle companies have Smartphone-like integrated entertainment displayprojectors and driver assistance technology into their vehicles to survive in the competitive local market.
While Tesla’s version of driver assistance has not yet been fully approved in China, domestic manufacturers have developed their own versions. Used by local companies such as Xpeng and BYD NVIDIAof chips, while Chinese telecom giant Huawei builds driving assistance system and in-car entertainment systems from other automakers.
Stephen Dyer, co-leader and head of AlixPartners’ Asia automotive business, said: “I think to have competitive cars in China,[foreign]companies need to have advanced driver systems comparable to what we see on some Chinese cars. Comparable systems.
He expects foreign carmakers to cooperate with Chinese companies in the field of driver assistance, not only for the local market but also for overseas markets.
Volkswagen last year had Investment of US$700 million Electric vehicle startups in China Xpeng Motors Produce models for delivery in China in 2026. Investment of €2.4 billion (US$2.5 billion) Its automotive software subsidiary forms partnership with Chinese self-driving chip maker horizon robot.
Other key partners in advanced driver assistance technology include Toyota’s announcement last year Established a joint venture with Chinese self-driving startup Pony.ai to mass-produce cars.
Chinese companies may not be easily acquired
It remains to be seen whether foreign automakers can build an effective advantage by partnering with Chinese companies selling their own cars or technology in the same market.
“Competition among domestic new energy vehicle brands is too fierce,” Weng Yajun, Shanghai-based M&A partner at JunHe Law Firm, said in Chinese (translated by CNBC). “You could put in all the effort and still only sell a few cars.”
Ong expects industry players to “fight to the death” for survival in the short term rather than acquire
China’s automakers have slashed prices to attract buyers while launching a slew of new models in just one year. even State-owned vehicles are in dire straits.
Wang Yiming, an analyst at Huaxing Securities, said this means foreign automakers must compete with state-owned automakers for any local acquisitions. He added that although Chinese startups are losing money, they are not yet at the point where they want to sell themselves.
Volkswagen’s stake in Xpeng Motors remains the most high-profile collaboration in the Chinese market to date between a foreign automaker and a Chinese electric vehicle startup.
The German company is trying other strategies to regain its market share. This month, its Audi brand partnered with SAIC, the Chinese state-owned automaker roll out A new electric vehicle brand in China has canceled its four-ring logo and instead spells out “AUDI” in rounded capital letters.
Yang Jing, director of corporate ratings for Fitch Ratings Asia Pacific, said that the market share of foreign automakers in China may decline next year, and some brands will basically withdraw from China.
Global auto companies also face competition from Chinese automakers expanding overseas, Yang noted. She noted that despite tariffs, such as in the EU, “Chinese companies will not easily give up overseas expansion for higher profitability.”
