China is pushing well-known automakers out of its market

China is acting “slowly but surely”, gradually and systematically ousting global automakers from its huge market.

How informs Bloomberg, in the 4th quarter of 2022, they had only 8% of the Chinese electric vehicle market. The agency notes:

“International traditional automakers have seen their market share drop from 61% in 2020 to 41% in the last quarter of last year. There should be a slight recovery in the first half of this year as these manufacturers sell off old stock, but BloombergNEF expects their the overall share this year will be well below 50%.”

In addition, there is a significant difference between traditional automakers in terms of the number of sales. Nissan and Honda, for example, have experienced significant declines over the past few years, while Toyota’s sales in China are holding up fairly well. Premium brands tend to perform better than mass market brands. The publication notes:

“The emergence of electric vehicles is a major factor in changing the automotive hierarchy in China. Automotive product planning cycles are long, and many legacy automakers have underestimated how quickly the Chinese market is moving to electric vehicles. and many of their electric vehicle offerings are not competitive with locals in price, range and performance. Their share of the Chinese electric vehicle market has been steadily declining as companies such as BYD and Tesla have taken the lead and local automakers have launched a flurry of electric models.”

In January and February of this year, sales of Japanese brands fell by 39%, German – by 21%. But the Chinese company BYD has already sold more than 300 thousand cars during this period, increasing sales by 70%. Its founder, Wang Chuanfu, said a few days earlier that the company aims to become China’s best-selling automaker by the end of the year.

Other factors also play an important role. On-board network connectivity and software are often stronger with Chinese brands, which is another point of differentiation. Chinese consumers tend to innovate faster than new car buyers in Western markets.

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