Trumpchi, Hiphi, Aito, Hima, Rising, Li, Neta, Maxus, Dayun, and its sub-brand Yuanhang, Arcfox, Jidu, iCar, Aion, Skyworth, and many more. Even if you are a loyal reader of our annual bible “All the Cars in the World”, it is most likely that all these brand names are unknown to you! This is perfectly normal because, according to specialists, the Chinese market would have a very large number of manufacturers. While some are sub-brands of well-established groups, many have been created very recently by startups often new to the automotive industry as they come from the tech world.
The relative youth of the Chinese automotive market and the shift towards electric vehicles, a technology less complicated to master than traditional engines for new players, have facilitated this proliferation – even exaggeration – of new brands, much like what happened in European countries at the beginning of the 20th century. For a European, the diversity of models, often very exotic, is therefore surprising in major cities like Guangzhou (Canton) or Beijing.
In cities where the population easily exceeds 10 million inhabitants, urbanization is surprisingly similar to that of the United States, with ubiquitous residential towers, immense skyscrapers, numerous elevated urban highways, multi-level urban interchanges, and often four or five-lane roads in each direction.
Stretched Vehicles in China
Among these Chinese cars, now the majority, you still come across quite a few European vehicles – mostly German – and Japanese cars, some American, few Korean, but almost no French. What is most surprising in these big cities is the total absence of sports cars and small cars, with a range composed of SUVs, of course, but also many Vans, and a high proportion of sedans, much more than here. As Chinese drivers also have to transport their parents, who typically have never owned a car and are highly respected due to their old age, buyers prefer models that offer maximum rear seat space so their elders can be transported as comfortably as possible. Thus, premium German cars (Audi A4 and A6, BMW 3 and 5 Series, Mercedes C, E, GLC) are only offered in their long versions called “L”.
While the vast majority of Chinese models are close to five meters, sometimes even more. If it weren’t for the fairly high density of two-wheelers, often electric (bicycles and scooters), you could think you were in the United States. A trend that is also found in the aisles of the latest Beijing Motor Show, where the stands of the aforementioned brands exhibit almost exclusively very large, even huge models with often exuberant designs and spec sheets as long as your arm. It’s as if the Chinese customer absolutely had to impress their peers, displaying their social success through this object where, in addition to transportation, they show off.
After immersing ourselves in the atmosphere of the eight halls of this bustling show – a strange contrast after years of almost blocking the country due to the health crisis – we think that, ultimately, the much-feared invasion of Chinese cars thanks to their very aggressive prices is probably not on the horizon. Because except for MG, which, in addition to its prices much lower than those of European electric vehicles, has models tailored to our market (MG4, MG3, EHS, etc.), all the Chinese models shown today seem far too large to appeal to us. Even the electric giant BYD is struggling with its Dolphin and Atto3, which are reasonable in size but disappointing to drive. And as Brian Gu, president of the new Xpeng brand, told us on site, while nothing is ruled out in the future, it is currently too early to develop specific models for markets other than China, which would be impossible to make profitable as a newcomer due to insufficient volumes.
Priority to the Local Market
The priority for Chinese manufacturers today is to consolidate sales in their national market, which is no longer growing (and may even decrease slightly to 23 million units) and where industrial overcapacity seems evident. Inevitably, some brands will not achieve the expected success and will disappear. While others will be absorbed by larger ones. This is how a market matures. At the same time, without domestic sales growth, it is tempting to try to grow elsewhere. So in Europe, where decision-makers want to promote electric technology, which China has mastered, by 2035.
But without suitable products and without an image, the challenge is daunting. Especially since their price advantage is likely to be challenged by the substantial taxes that Europe wants to quickly impose on Chinese models!