Chinese automakers BYD and Chery increased sales by approximately 40% worldwide in 2024, while Tesla faced an annual sales decline for the first time. This year, sales of the American electric car pioneer are falling as CEO Elon Musk alienates customers with his political activities. Reuters writes about this, as reported by UNN.
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BYD, Chery, and other Chinese car manufacturers have changed the global automotive market landscape thanks to their unprecedented flexibility. They have found ways to develop new models in less than half the time it would take foreign competitors for such tasks, contributing to explosive growth.
In October 2023, Chinese automaker Chery ordered engineers and suppliers to quickly go to the test site in Zhaoyuan, Shandong province.
Over the weekend, they had to overhaul the suspension and steering of the Chinese version of the Chery Omoda 5 SUV for Europe, a key market in the model's global expansion. The problem was that the car was designed for smooth Chinese streets and low speeds. Now it had to withstand Europe's winding and bumpy roads.
Six weeks later, Chery began supplying dealers with the European-spec Omoda 5 with new steering, traction control, brakes, shock absorbers, and tires.
You can forget about European automakers offering such a radical solution to the problem in such a short time. It's impossible.
Tonelli, who previously worked at an Italian automaker's office and a Korean tire manufacturer, estimated that it would take Western manufacturers more than a year to implement similar improvements due to their comparatively bureaucratic organizations.
The Chery Omoda update is an example of the revolutionary speed and flexibility of Chinese automakers, who have seized control of their domestic market, the world's largest, from once-dominant foreign competitors. Now, emerging Chinese auto giants are competing for global market expansion, with Chery being a leading exporter. EV giant BYD, China's largest automaker, poses a greater long-term competitive threat, industry executives say.
China's new leadership in the automotive industry is largely due to a single manufacturing achievement – reducing car development time by more than half, to 18 months for a completely new or updated model. Consulting firm AlixPartners found that the average age of a Chinese-branded electric or hybrid model sold domestically is 1.6 years compared to 5.4 years for foreign brands.
Such speed has bewildered traditional automakers, who traditionally redesigned cars about once every five years or once a decade for pickups.
Recall
China leads the technological revolution in the automotive industry, but domestic competition affects profitability. Experts predict that only a dozen companies will "survive". Among those facing difficulties is Xpeng.