November 27, 2024
Alain McKenna
These are experts who say it: today, Chinese manufacturers embody a rising and disruptive force in the automobile sector in the same way as the Korean manufacturers in the 1980s and the Japanese in the 1970s.
This is what automotive sector experts gathered in Michigan at the end of November to discuss the future of the industry. The name of the conference? Automotive Futures. That says it all.
Obviously, a lot of things can change in a short time in the world, especially with the arrival at the head of the United States of Donald Trump at the end of next January. But overall, this should not slow down a global movement that is already well underway: that of the entry among the major international manufacturers of the first major Chinese brands: BYD, NIO, Geely and others.
It has not yet arrived in North America, but this transformation first began in China. Until the end of the 2000s, more than two-thirds of the Chinese domestic market was made up of foreign car brands. Today, just over one in two cars sold in China is a Chinese brand.
Globally, Chinese brands are expected to account for a third of all vehicles sold each year somewhere around 2030, or within five years.
What analysts at the Automotive Futures conference indicated, among other things, is that Chinese vehicles sold internationally are mostly electric, first, and that their technology is younger “by about 1.6 years” compared to their competitors. In other words, the threat weighs mainly on non-Chinese brands to accelerate their technological progress.
Moreover, Chinese brands have access to electrical components which allow them to sell their vehicles 35 to 55% cheaper. We already knew that. What is less known is the extent to which analysts seem convinced that Chinese brands will be able to overcome adversity, such as their sourcing from suppliers with more than questionable practices and their proximity to the Chinese government.
If this proves true, it risks complicating the task of governments hoping to slow down the arrival of Chinese brands on their territory…
About the author
Alain McKenna has been covering electronics, technology, automotive, media and finance for 20 years. He has written for the largest Quebec dailies, is the author of four books and is a regular speaker on Quebec television and radio on various current topics.
