China Commentary
New brands offer greater choice for customers, and fresh impetus to a stagnating EV market. But for the established hierarchy, they bring fresh challenges.
The global auto industry may be heading for a seismic shake-up, but marrying Nissan Motor Co. to Honda Motor Co. looks unlikely to succeed in a game of survival of the biggest.
Most global automakers, unable to match or catch up with China’s rapid shift to electrified vehicles, and losing market share, still seem to have no idea how to respond other than cutting production.
With greater transparency, the technology giant is winning more customers among domestic automakers as a supplier for smart, electrified vehicles.
SAIC-GM in June cut production by 70 percent to below 28,400, with year-to-date output slipping 54 percent to just under 210,000.
After the EU announced provisional punitive tariffs of up to 38.1 percent on China-made EVs, the Chinese side has kicked off what seems to be an all-out campaign to pressure the trade bloc to withdraw the tariffs, with results remaining to be seen.
While overall vehicle sales are losing steam in China, demand for electrified vehicles remains robust. But that doesn’t mean China will ditch fossil fuel-powered engines any time soon, given the traction that plug-in hybrids and range-extended EVs are getting.
Beijing may raise tariffs to 25 percent from 15 percent on imported vehicles with engine sizes above 2.5 liters, the China Chamber of Commerce to the EU said this week, posing a threat to Detroit's efforts to sell its most profitable vehicles in the biggest car market.
To outsiders, China’s electrified-vehicle sector begs for consolidation given the high level of fragmentation and pricing battles that have only intensified this year. But reality indicates otherwise.
With profits scarce, more Chinese automakers are injecting a dose of reality and prudence in a market tilting more and more toward EVs.