U.S. automakers and their non-Chinese counterparts are engaged in a life-or-death battle as local Chinese rivals overtake them.
With massive government investment and subsidies, Chinese companies stand out from the competition in electric vehicle technology and software. U.S. automakers’ sales have fallen sharply since their peak a few years ago.
“I don’t want to sound too dramatic,” said Michael Dunne of Dunne Insights, who has been studying markets in China and other Asian countries for nearly 30 years. “When I say in the next five years, I just want to be realistic, Ford, General Motors, modernlet Nissan It is very likely that he will leave China. They just don’t compete with the Chinese anymore.
GM’s sales in China, including sales at its joint ventures there, have fallen from a high of 4 million vehicles in 2017 to 2.1 million vehicles in 2023.
Equity revenue from the country, GM’s measure of profitability in its second-largest market, fell 34% for the year to $446 million, including a 54% year-over-year decline in the fourth quarter alone.
Several factors have contributed to the decline of U.S. automakers in China.
Chinese automakers have learned a lot from foreign automakers, which they have long been legally required to partner with to operate in the region. Later, those successful Chinese companies acquired foreign brands, including British brands MG and Lotus, and Sweden’s Volvo.Chinese brands – including BYD, among which Berkshire Hathaway Owning shares – There has also been a surge in outside investment.
The Chinese market has undergone tremendous changes in the past decade. The concept of a car as a rolling computer or smartphone has become a reality in the country. In fact, recent entrants include mobile phone manufacturers Xiaomi and Huawei.
That’s why U.S. automakers shouldn’t give up on China, said Bill Russo, a former Chrysler executive who heads the Shanghai-based consultancy Automobility. These shifts over the past few years will continue, he said.
“If you’re not playing in China, what are you going to do when China shows up in your backyard?” Russo said. “How do you know how to compete with them? You haven’t even tried.”
About The Author
