Automechanika Shanghai

The Chinese market is the world’s largest market with more than 25 million cars. Western Japanese and Korean manufacturers have long been dominant in this market, the vast majority of automobiles being produced by joint ventures between Chinese and foreign manufacturers. For several years, however, the specifically Chinese manufacturers have been growing. Dominant on heavyweights. In recent years, restructured and growing, private vehicles have progressed in two main segments: inexpensive SUVs and electric vehicles for which they have received strong support from the Chinese authorities. In addition to this market, for several years now, there has been a dynamic of imported vehicles facilitated by the reduction in customs duties that began in the early 2000s. The Chinese market has thus become the leading market for brands such as Range Rover, Porsche, Bentley … 2018 nevertheless marks a breakthrough.

After falling 11.7% in October, car sales could decline for the year as a whole. A first in decades.

The automobile shows one of the largest sectoral declines in Europe, with Beijing having dampened hopes of lower car purchase taxes to revive demand in a slowing phase. The Chinese government planning body said it had not considered cutting vehicle purchase tax in half in the world’s largest auto market.

However: in fifteen years, local sales have multiplied by 25! On the other hand, a volume of transactions that makes all the other markets look like small players. In 2017, nearly 25 million new cars were sold in China. Auto factories in China assembled 29 million vehicles in 2017, including 24.8 million passenger cars. In the top 10 best-selling brands, five are Chinese … and the other five are allied with a Chinese industrialist.

At the same time, 100% electric cars alone accounted for 468,000 registrations (+ 82% compared to 2016!). And as China has set quotas (12% of electrified vehicles in 2020) and in turn plans to ban thermal vehicles – without having set an ultimatum – it is obvious that sales of hybrids and electrics are going fly to China. And that’s just the beginning: “We believe China is on the cusp of an electric utility revolution,” said Shen Haiyin, co-founder of Singulato. Its future factory is just starting to emerge in the Chinese province of Hunan, but the start-up Singulato Motors has big ambitions: to assemble 50,000 electric vans per year to take advantage of the growing demand in China for commercial vehicles and electric trucks.

The weak growth of the Chinese automobile market in 2017 should not mask the fundamental movement: China is thirsty for automobiles, whether they are the gigantic coastal cities or the interior of the country. For 2030, the McKinsey Cabinet predicts a market of more than 40 million units annually, which would represent more than a third of the world market. Also, China is already attacking the electric market, possibly to dominate it as well.