In a striking forecast, industry experts predict that by 2030, one in every three cars sold worldwide will be produced by a Chinese carmaker, echoing earlier predictions indicating similar findings.
This figure represents a dramatic leap from the current 21% market share to a formidable 33%, indicating a marked shift in the global playing field.
Worldwide growth
A study by AlixPartners outlines that Chinese brands are set to consolidate their dominance at home, increasing their share of the domestic market from 59% to a staggering 72%, bolstered by homegrown brands like BYD and GWM.
However, the more profound implications of this growth extend far beyond China’s borders. Analysts predict that Chinese makers will increase their presence substantially in several key regions worldwide.
They are also expected to double their market share in Europe, climbing from 6% to 12% by the decade's end.
This growth will be driven by the competitive advantages that Chinese manufacturers hold over their Western counterparts, including faster development times and lower production costs.
In Russia, the share is anticipated to surge from 33% to a dominant 69%, showcasing China's strategic focus on markets where they can leverage their pricing and production efficiencies.
In regions such as the Middle East and Africa, China's market share is projected to grow fivefold, from 8% to an impressive 39%. Central and South America are also on the radar, with expectations of a rise from 7% to 28%.
These expansions are driven by the higher margins Chinese automakers enjoy, aggressive pricing strategies, and their ability to rapidly refresh model lineups to meet local demands.
Challenges ahead
Despite these global advances, certain markets remain challenging. The Biden Administration's implementation of new 100% tariffs will likely curb China's push into North America, while Japan's entrenched automotive market poses another significant barrier.
Nevertheless, a modest growth from 1% to 3% in North America and an introduction into the Japanese market, from 0% to 1%, are still on the cards.
According to Andrew Bergbaum of AlixPartners, Chinese automakers' success is not solely due to cost advantages. "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 Bergbaum.
Moreover, China's lead in emerging technologies, particularly battery production, has been pivotal.
This predicted growth spells significant challenges for Western automotive brands, which will have to adapt swiftly to retain their market shares. The Chinese approach, characterised by rapid development cycles and a focus on technology integration, sets a high bar for global competitors.