A GAC Aion Hyper SSR electric sports car is on display during Auto Guangzhou 2023 at the China Pazhou Import & Export Fair in Guangzhou, China’s Guangdong Province, in November. 17, 2023.
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Chinese automakers are expected to continue expanding rapidly outside their home country to reach 33% of the global auto market share by 2030, according to a new report released Thursday by renowned consulting firm AlixPartners.
Most of the growth, from a projected 21% market share this year, is expected to come from outside China. Sales outside China are expected to grow from 3 million this year to 9 million by 2030, representing growth from 3% to 13% market share by the end of this decade.
The rapid expansion of Chinese automakers is a growing concern for automakers and senior politicians around the world. Many fear that less expensive vehicles made in China will flood the markets, undercutting domestically produced models, especially all-electric vehicles.
AlixPartners said it expects Chinese brands to grow in all markets globally. However, the firm added that it expects much smaller expansion in Japan and North America, including the US, where vehicle safety standards are stricter and a 100% tariff on Chinese imported vehicles has been announced.
“China is the new industry disruptor, capable of creating must-have vehicles that are faster to market, cheaper to buy, advanced in technology and design, and more efficient to build,” Mark Wakefield, global co-head of the automotive and industrial practice. at AlixPartners, it said in a statement.
In North America, Chinese automakers are projected to reach just 3% of the market, mostly in Mexico, where one in five vehicles is expected to be a Chinese brand by 2030. In most other major regions of the world, AlixPartners reports that the share of Chinese auto manufacturers is expected to grow exponentially. These areas include Central and South America, Southeast Asia, and the Middle East and Africa.
Chinese brands in China are also expected to grow from 59% to 72% in market share, according to AlixPartners. Older vehicle manufacturers such as General Motors have lost significant ground in China in recent years amid the rapid growth of China’s domestic auto industry and companies such as BYDGeely and Nothing.
Models showcasing Chinese automaker BYD Song MAX electric car at the 45th Bangkok International Motor Show 2024 in Nonthaburi Province, on the outskirts of Bangkok, Thailand, on March 30, 2024.
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In Europe, where Chinese automakers have grown rapidly in recent years, the market share of Chinese auto brands is expected to double from 6% to 12% by 2030, according to AlixPartners.
Chinese automakers are expanding because they have cost advantages, localized manufacturing strategies that will enable a build-where-sell strategy in non-Chinese markets, and high-tech vehicles that meet evolving consumer preferences for design and coolness. according to the transfer.
“Automakers that expect to continue operating on business-as-usual principles are in for more than a rude awakening, they’re heading for obsolescence,” Andrew Bergbaum, global co-head of the automotive and industrials practice, said in a statement. at AlixPartners.
Chinese EV makers create new products in half the time of older automakers 40 months vs. 20 months mostly designing and testing to sufficiently meet standards vs. over-engineering. They also have a 35% “Made-in-China” cost advantage.
Wakefield said that for traditional automakers to compete with Chinese automakers, they need to rethink their business development processes and the pace of vehicle development.
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