In China, the party is over for foreign brands

For several years, car brands have seen a huge opportunity in the world’s largest market. If the first times were promising with however some concessions like the obligation to associate with a local actor to set up factories, everyone seemed to find their account. We have therefore seen the emergence of models specific to this market. Everything was fine in the best of all worlds then things started to get seriously complicated with the COVID pandemic.

With its extreme hygiene measures, the factories were shut down for very long weeks resulting in a huge loss of earnings for the foreign brands established on site but also colossal manufacturing delays for the models built on site and then marketed in Europe, like the DS9 or the Citroen C5 X. And speaking of Stellantis precisely, it was last October that the group announced the closure of its joint venture with GAC and to stop the manufacture of Jeep in the country.

However, with more than 26 million vehicles sold last year, the Chinese market has something to whet the appetite of European firms, but today their market shares continue to decline. Thus, from 60% two years ago, it has fallen to 43%. Beyond the domestic context, this impressive fall is mainly explained by a change in mentality among consumers and Chinese leaders.

Aware that they would never be able to catch up on thermal energy, manufacturers have invested heavily in electricity and it works. With great blows of state subsidies for manufacturers, but also for customers, sales have soared and we have seen the appearance on the national and international scene of brands such as BYDGeely, MG or Aiways with gigantic ambitions as we saw during the last Paris World Cup.

The Chinese enthusiasm for electric vehicles is even greater than the government’s expectations. This year, more than a third of vehicles sold should be electric, whereas they represented only 15% of sales in 2021. China has clearly succeeded in its transition to electric. Let’s just hope that prey for the Europeans, the Chinese will not become the predator of the latter.

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