The greatest auto market in the world, China's, is moving quickly toward an electric future, leaving major international companies in the backseat.
Car executives will return to a very different market from the one they left in 2021 when the industry assembled for a small event under rigorous COVID-19 rules when they meet in Shanghai for the car show, which opens on Tuesday.
The largest adjustment: China-made companies are now market leaders in several categories, and their ascent has been fueled by new electric-drive vehicles that are gaining popularity both domestically and abroad.
The greatest winner has been BYD, which will use the Shanghai show to debut two new electric vehicles (EVs): a more expensive EV designed to look like an SUV and a new hatchback aimed at consumers looking for the best value.
According to an examination of sales data, BYD sales in China are up about 69% this year, giving it an 11% share of the overall auto industry, greater than either the Volkswagen brand or the Toyota brand.
"The stratification of this market into clear winners and losers is becoming clear," Bill Russo, founder of consultancy Automobility said in a note issued on Tuesday. "And there are very few winners and a whole lot of losers."
According to figures from the China Passenger Car Association, the first quarter saw a 13% decline in passenger car sales in China.
However, sales of EVs and plug-in hybrids, a segment now dominated by Chinese manufacturers headed by BYD, increased by 22%. Internal combustion engine vehicle sales decreased by a nearly comparable amount.
For companies like Volkswagen, General Motors (GM.N), Honda, and Nissan, the outcome has been a double blow. Both sales and market share are declining.
In a pricing battle that has boosted sales of EVs and plug-in hybrid electric cars (PHEVs), all of which are classified as "new energy vehicles" in China, more than 40 auto makers have followed Tesla in lowering costs on EVs since January. Additionally, it has reduced overall industry profitability, said analysts.
For many years, combustion-engine vehicles produced by international automakers in collaboration with Chinese companies dominated the entry-level passenger car market in China.
However, this year has been a complete disaster for gasoline-only automobiles for cars costing between $22,500 and $30,000. Sales in the first quarter decreased by 20.5% while EV and plug-in hybrid sales increased by 68%.
With a starting price of roughly $20,000, BYD's Song plug-in hybrid SUV outsold the Nissan Sylphy, which had been China's best-selling vehicle for the previous three years. The Volkswagen Passat was surpassed by BYD's Dolphin EV, which has a starting price of roughly $17,000.
The entry-level market in China is probably "the final bastion" for gasoline-only cars due to the cost pressure that battery materials are putting on EVs, according to Xu Haidong, deputy chief engineer at the China Association of Automobile Manufacturers.
With costs ranging from $52,500 to $60,000 in China's luxury segment, electric-drive vehicles are already the most popular.
For automobiles with a combustion engine but the ability to be charged and run for shorter distances on electric power, or plug-in hybrids, BYD dominates the Chinese market.
More than half of BYD's sales this year have been plug-ins, allowing the business the ability to compete on pricing across its whole line-up, according to analysts.
Sales of Tesla's Model 3 sedans and Model Y crossovers in China increased by 27% in the first quarter to little over 137,000 units. After lowering prices in China by between 6% and roughly 14% in January, Tesla also saw a rise in market share.
That resulted in starting costs for Teslas in China that were between $7,500 and around $10,700 less expensive than the now lowered U.S. rates.
When Tesla releases its first-quarter financial results on Wednesday, analysts and investors will pay close attention to what that means for margins.
“Gaining further share in the key China market will be the hearts and lungs of the Tesla growth story,” Wedbush analyst Daniel Ives said in a note on Monday.
China's exports, driven primarily by EVs and PHEVs, are expanding quickly, posing a significant challenge to well-known brands. China's exports increased 83% last quarter compared to the same period the previous year.
Exports from China to BYD, which sells its vehicles in Europe and Southeast Asia, increased 13-fold.
(Source:www.theprint.in)
Car executives will return to a very different market from the one they left in 2021 when the industry assembled for a small event under rigorous COVID-19 rules when they meet in Shanghai for the car show, which opens on Tuesday.
The largest adjustment: China-made companies are now market leaders in several categories, and their ascent has been fueled by new electric-drive vehicles that are gaining popularity both domestically and abroad.
The greatest winner has been BYD, which will use the Shanghai show to debut two new electric vehicles (EVs): a more expensive EV designed to look like an SUV and a new hatchback aimed at consumers looking for the best value.
According to an examination of sales data, BYD sales in China are up about 69% this year, giving it an 11% share of the overall auto industry, greater than either the Volkswagen brand or the Toyota brand.
"The stratification of this market into clear winners and losers is becoming clear," Bill Russo, founder of consultancy Automobility said in a note issued on Tuesday. "And there are very few winners and a whole lot of losers."
According to figures from the China Passenger Car Association, the first quarter saw a 13% decline in passenger car sales in China.
However, sales of EVs and plug-in hybrids, a segment now dominated by Chinese manufacturers headed by BYD, increased by 22%. Internal combustion engine vehicle sales decreased by a nearly comparable amount.
For companies like Volkswagen, General Motors (GM.N), Honda, and Nissan, the outcome has been a double blow. Both sales and market share are declining.
In a pricing battle that has boosted sales of EVs and plug-in hybrid electric cars (PHEVs), all of which are classified as "new energy vehicles" in China, more than 40 auto makers have followed Tesla in lowering costs on EVs since January. Additionally, it has reduced overall industry profitability, said analysts.
For many years, combustion-engine vehicles produced by international automakers in collaboration with Chinese companies dominated the entry-level passenger car market in China.
However, this year has been a complete disaster for gasoline-only automobiles for cars costing between $22,500 and $30,000. Sales in the first quarter decreased by 20.5% while EV and plug-in hybrid sales increased by 68%.
With a starting price of roughly $20,000, BYD's Song plug-in hybrid SUV outsold the Nissan Sylphy, which had been China's best-selling vehicle for the previous three years. The Volkswagen Passat was surpassed by BYD's Dolphin EV, which has a starting price of roughly $17,000.
The entry-level market in China is probably "the final bastion" for gasoline-only cars due to the cost pressure that battery materials are putting on EVs, according to Xu Haidong, deputy chief engineer at the China Association of Automobile Manufacturers.
With costs ranging from $52,500 to $60,000 in China's luxury segment, electric-drive vehicles are already the most popular.
For automobiles with a combustion engine but the ability to be charged and run for shorter distances on electric power, or plug-in hybrids, BYD dominates the Chinese market.
More than half of BYD's sales this year have been plug-ins, allowing the business the ability to compete on pricing across its whole line-up, according to analysts.
Sales of Tesla's Model 3 sedans and Model Y crossovers in China increased by 27% in the first quarter to little over 137,000 units. After lowering prices in China by between 6% and roughly 14% in January, Tesla also saw a rise in market share.
That resulted in starting costs for Teslas in China that were between $7,500 and around $10,700 less expensive than the now lowered U.S. rates.
When Tesla releases its first-quarter financial results on Wednesday, analysts and investors will pay close attention to what that means for margins.
“Gaining further share in the key China market will be the hearts and lungs of the Tesla growth story,” Wedbush analyst Daniel Ives said in a note on Monday.
China's exports, driven primarily by EVs and PHEVs, are expanding quickly, posing a significant challenge to well-known brands. China's exports increased 83% last quarter compared to the same period the previous year.
Exports from China to BYD, which sells its vehicles in Europe and Southeast Asia, increased 13-fold.
(Source:www.theprint.in)
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