First smiled at, then asked
China wants to dominate the global auto market
04/12/2023, 2:48 p.m
For a long time, China tried in vain to conquer the world market with its cars; their quality has so far been smiled at. But that is changing – and rapidly. China will soon be leaving the major car nations behind in terms of exports. Chinese automakers are already market leaders in some parts of the world.
Cars from China are becoming an export hit: After several failed attempts to gain a foothold on the world market, the People’s Republic has recently celebrated remarkable successes. According to the Chinese automobile association CAAM, Chinese car exports have tripled to around 2.5 million vehicles annually since 2020 alone.
China has now moved up to third place in the world ranking of exporters. Germany is just ahead of them, followed by Japan. The German Association of the Automotive Industry (VDA) reported 2.61 million passenger cars exported from Germany last year. Japan exported around three million passenger cars. But while vehicle exports from the old industrial nations are progressing slowly or not at all, demand for cars from China is growing rapidly.
Already market leader in parts of the world
The race to catch up will be a key theme at the Shanghai Auto Show, which begins next Tuesday. Chinese manufacturers are already market leaders in parts of the Middle East and Latin America. But also in Europe more “Made in China” rolls over the streets. The Chinese actually wanted to be present here more than a decade ago. But in the age of the internal combustion engine, they could not close the gap to western competition. They embarrassed themselves in safety tests and with vehicles of dubious quality. The cards were reshuffled with the electric car. Here, Chinese manufacturers are suddenly regarded as technology leaders.
According to car experts, thanks to an earlier start, China is not only ahead in the construction of electric cars, but also in terms of connectivity and autonomous driving, some Chinese manufacturers are better positioned than their German competitors, for example. The Chinese group Geely cleverly took over the Swedish brand Volvo years ago and fully geared towards an electric future.
globalization strategy with their electric cars
But Chinese e-car brands such as BYD or Nio are at least slowly gaining ground abroad: The Chinese are currently launching a globalization strategy with their e-cars, which not least affects Europe and Germany, says industry expert Stefan Reindl, head of the Geislinger Institute for automotive industry. “I believe that one or the other Chinese manufacturer will have a market share of up to two percent in Germany in the next five years,” says Reindl.
Above all, the domestic industry is not in a position to operate in the compact car class with reasonably competitive prices. However, the Chinese manufacturers needed established dealers as sales partners in order to use existing dealer networks and locations. These are particularly important for vehicle service, because e-cars also need maintenance and repairs. “Many Chinese manufacturers think they can shape sales in Germany and Europe with digital structures alone,” says Reindl. But in this country, customer acceptance for such sales concepts is still low.
It could still take a while on the German car market
Even observers in China doubt that their cars will compete with the Germans in their home market for any significant amount of business in the foreseeable future. “It will take a long time before Chinese auto companies can gain market share in mature markets,” says Chinese auto analyst Zeng Zhiling. In Southeast Asia, South America and Africa, on the other hand, the Chinese are much better positioned.
“Competition stimulates business,” says a VDA spokesman calmly. The German car industry is moving forward resolutely: in Germany alone, the German manufacturers are currently offering more than 90 e-models, and by the end of 2024 there should be 100. When it comes to product quality, German manufacturers are leaders. In Germany, more than every second newly registered electric car was delivered by a German manufacturer in 2022. The market share of Chinese brands is six percent.
“The car of the future comes largely from China,” says industry expert Ferdinand Dudenhöffer. It is a smart strategy to first become strong in your home market and then expand step by step. The Chinese felt their way forward. They are already relatively strong in Eastern Europe, and they also have a certain strength in England. “They are only coming to Germany now,” says Dudenhöffer.