Chinese brands are expected to significantly increase sales in markets outside of China while also competing stronger in the domestic markets, perhaps
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Chinese automotive companies are on the march and it is likely that it will soon turn into an outright global sprint. As per a study conducted by AlixPartners, Chinese car companies in particular are not just set to increase dominance in the home market but also command a sizeable chunk of global sales by 2030.
AlixPartners, a US-based financial advisory and global consulting firm, has predicted one in every three new cars sold in global markets by 2030 to be from a Chinese manufacturer. It further predicts that Chinese automotive companies will increase global market share from 21 per cent at present to 31 per cent by the close of this decade. This, it is highlighted, will be on the back of both expansion to foreign markets by Chinese manufacturers as well as dislodging western brands within China, the world’s biggest vehicle market.
In what could send jitters down the spine of non-Chinese automotive companies, the study from AlixPartners further predicts that sales of Chinese companies outside of China will grow exponentially, from three million expected in 2024 to nine million by 2030.
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At present, Chinese manufacturers have a 59 per cent market share within China, 33 per cent market share in Russia, six per cent in Europe, one per cent in North America, seven per cent in central and south America, and eight per cent in the middle-east and Africa region. The market share in south and south-east Asia is at three per cent at present and predicted to rise to 31 per cent by 2030.
Beating past roadblocks, the Chinese way
The recent tariff on China-made EVs in Europe and the decision to increase import duty on Chinese cars by the US government are stumbling blocks. But the AlixPartners study states that while pushing into North America and Japan are likely to remain challenges, Chinese companies will look at reaping rewards elsewhere. It is stated that the share in Europe will expand to 12 per cent despite tariff-related issues while Russia, middle-east and Africa, and south and south-east Asia will be fertile grounds.
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Factors that are helping Chinese automakers include low manufacturing cost within China as well as a focus on offering models that are now reliable as well as packed with features. “Chinese brands put a higher value on features customers can actually experience, such as design and in-cabin tech; they are ruthlessly focused on maintaining their cost advantage even as they build factories abroad,” says Andrew Bergbaum of AlixPartners.
First Published Date: 02 Jul 2024, 06:33 AM IST