The global auto industry is trembling amid the dominance of domestic brands in China, such as BYD-mass media

The global auto industry is trembling amid the dominance of domestic brands in China, such as BYD-mass media

Kyiv  •  UNN

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Foreign automakers are losing ground in the Chinese market due to the transition of consumers to domestic electric vehicles. Volkswagen, Mercedes-Benz and other Western companies are facing a drop in sales, while Chinese brands are strengthening their positions.

China is becoming a money pit for foreign automakers - major brands are losing ground in the once-lucrative market as Chinese consumers switch to domestic electric vehicles.

UNN iz sent to The Wall Street Journal, and Handelsblatt 20 Min Holding.

Details

The former car industry has closed its doors and is seriously losing sales in China, especially Volkswagen, Mercedes-Benz, GM and Honda. The middle of the reasons is the cheapness of electric models of far-off military leaders. Go to BYD, Geely and Li Auto.

We clearly see the displacement of traditional drive systems. In parallel with the sharp growth in the share of electric vehicles in China, the dominance of domestic suppliers is growing

- explained Jan Burgard, head of the automotive consulting company Berylls by Alix Partners.
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The situation is becoming risky, especially for mass manufacturers such as Volkswagen. The largest European car manufacturer may receive about three billion euros less revenue this year than in 2018. Now the downward trend continues. In the first half of the year, shipments fell another four percent to 931,000 units. In four and a half years, Volkswagen Group's market share in China among all sub-brands has fallen from 19 percent to 14 percent.

Another German flagship is now also struggling in China: Mercedes-Benz. Since the group operates mainly in the premium and luxury segments, its business is still doing quite well. But in the first half of the year, there was a decrease of 10 percent - 352,000 cars were sold. The proportional result of joint production with the Chinese state-owned company Baic even decreased by 15%.

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Meanwhile, BYD Seagull and other compact and small cars from Chinese manufacturers that can change the automotive industry with their low prices.

These vehicles are manufactured in China for much less than international brands outside of China, often in government-backed factories, and are said to be offered in Europe for less than 20,000 euros, while in China they cost around 10,000 euros. - says Jurgen Selter, an expert in the automotive industry in Asia and the United States.

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Figures from Statistics Austria show a slight decline in demand for electric vehicles in the country, but it is BYD that now occupies a permanent place in the top 3 most popular brands among purely electric registrations.

However, European, in particular German manufacturers have "a strong brand image around the world, which is not enough for young Chinese brands.

Of the current about 130 Chinese brands, only ten can survive, as Chinese cars will become consumer goods, notes the expert.

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