Analysts predict a surge in Chinese car sales, both domestically (up to 72 per cent market share by 2030) and globally (one-third of all car sales). T
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The global automotive landscape is on the cusp of a significant shift, with Chinese automakers projected to capture a staggering one-third of global car sales by 2030. This dramatic prediction, made by industry analysts after studying China’s rapid growth trajectory, highlights the nation’s burgeoning influence in the car industry.
While Chinese car brands currently hold a respectable 21 per cent market share, analysts anticipate a period of explosive growth within the domestic market. This growth will likely come at the expense of established Western brands, with Chinese domestic players increasing their market share from 59 per cent to 72 per cent by 2030.
The truly concerning aspect for Western automakers lies outside of China. AlixPartners, a global consulting firm, predicts a surge in Chinese automaker sales outside of their home market – from 3 million in 2024 to a 9 million by the end of the decade. While the newly imposed 100 per cent tariffs by the Biden Administration might limit Chinese expansion in North America and Japan is expected to remain a challenging market to penetrate, the report predicts significant gains elsewhere.
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Chinese automakers are expected to double their European market share to 12 per cent by 2030. Additionally, their dominance in the Russian market is projected to increase from 33 per cent to a commanding 69 per cent. Furthermore, analysts anticipate substantial growth in emerging markets with Middle East and Africa sales rising from 8 per cent to 39 per cent, and Central and South America experiencing a similar jump from 7 per cent to 28 per cent.
Competitive advantages fueling growth
Beyond their sheer size and domestic dominance, several factors contribute to the projected success of Chinese automakers. Firstly, Chinese manufacturers benefit from significantly shorter development cycles compared to their Western counterparts.
This translates to a faster pace of innovation and the ability to refresh model lineups more frequently. Secondly, Chinese automakers are renowned for their aggressive pricing strategies and higher profit margins.
Analysts also highlight the growing focus of Chinese brands on features that resonate with customers, such as cutting-edge design and in-cabin technology. Additionally, they commend their ruthless dedication to maintaining cost advantages even during overseas expansion.
Perhaps the most concerning aspect for established carmakers is China’s lead in critical emerging technologies, particularly battery production, which is expected to be a key differentiator in the electric vehicle revolution.
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“Chinese brands prioritise features that directly impact the customer experience, such as design and in-car technology,” observes Andrew Bergbaum of AlixPartners. “They are laser-focused on maintaining their cost advantage, even while establishing factories abroad.
Additionally, they have built a substantial lead in crucial emerging technologies like battery production.” Bergbaum concludes by stating that these capabilities have already captivated the Chinese market and are poised to define the global automotive landscape in the years to come.
First Published Date: 30 Jun 2024, 08:30 AM IST