Chinese automakers are taking center stage and setting new benchmarks for an industry historically steered by the West, Japan, and South Korea, AlixPartners said.
Chinese automakers are continuing to expand their share of the domestic market and are poised to become a dominant force in the international marketplace, said AlixPartners, a New York-based consulting firm.
Chinese brands are set to keep the throne at home and take over 70 percent of China's market share by 2030, AlixPartners said in a July 11 report.
The 2024 AlixPartners Global Automotive Outlook, the 21st edition of the annual survey, explores Chinese OEMs' recipe for success and lessons for traditional automakers.
Globally, Chinese brands are expected to be a dominant force, selling 9 million vehicles outside of China by 2030, accounting for 33 percent of the global market share, the report said.
"Chinese automakers are taking center stage and setting new benchmarks for an industry historically steered by the West, Japan, and South Korea," said Stephen Dyer, Partner & Managing Director, Co-Leader of Greater China, and Head of the Asia Automotive and Industrials Practice at AlixPartners.
Chinese automakers have plenty of lessons to offer their global counterparts that are applicable not only to China but also to the global market, AlixPartners said.
Mature automakers must find a way to compete with their Chinese counterparts or they will cede the volume electric vehicle (EV) market to Chinese brands, much like how the US automakers ceded the domestic small car market to Japanese automakers in the 1980s, according to the report.
It's worth noting that Chinese carmakers are currently competing fiercely at home, while they are facing restrictions, including higher tariffs, in international markets.
The US government announced plans in May to nearly quadruple tariffs on Chinese-made EVs, with a final rate as high as 102.5 percent.
Canada launched a 30-day consultation on July 2 to discuss imposing restrictions, including additional tariffs, on EVs imported from China.
The European Union has imposed provisional additional tariffs on EVs imported from China since July 5 on top of the original 10 percent tariffs, with rates varying among carmakers, with some facing additional tariffs that will be as high as 38.1 percent.
The recent EV tariff discussions come as no surprise to Chinese EV makers, AlixPartners said.
While tariffs in the US or Europe will create hurdles for Chinese EV makers, they will drive the localization of assembly operations in key export markets such as Southeast Asia, Mexico and Europe, said Yichao Zhang, Partner of the Greater China Automotive Practice at AlixPartners.
Many Chinese automakers either have well-established expansion plans or have already made significant investments in setting up assembly operations in Europe. These new tariffs could further accelerate those plans, allowing them to thrive on the continent, Zhang said.
AlixPartners expects Chinese brands to double their market share in Europe to 12 percent by 2030, from 6 percent in 2024.
Eventually, the most successful Chinese EV makers will become truly global brands and build in the countries where they sell, just like the existing giants, Zhang added.
Globally, new energy vehicles (NEVs) are expected to account for 45 percent of the global market by 2030, according to AlixPartners, thanks to a surge in demand for plug-in hybrid electric vehicles (PHEVs), while demand for combustion-engine vehicles is expected to slip below 40 percent.
In China, AlixPartners forecasts that NEVs will account for 77 percent of the overall market by 2030, up from an estimated 41 percent in 2024.
This can be attributed to battery electric vehicle (BEV) price parity, good charging infrastructure, and easier licensing of NEVs in China, while western customers see BEV priced 35-55 percent more than ICE alternatives, the report said.
Become A CnEVPost Member
Become a member of CnEVPost for an ad-free reading experience and support us in producing more quality content.
Already a member? Sign in here.
Follow CnEVPost on Google News