The Rise of Chinese OEMs: Challenges and Opportunities for International Automakers

Over the past three years, international legacy OEMs have witnessed a gradual decline in their market share within China’s automotive industry. From a staggering 67% in 2020, their dominance has dwindled to a mere 43% in the first quarter of 2023. Ahead of Tesla, BYD and other Chinese EV startups have achieved the largest market share by emphasizing competitive electrified models. Meanwhile, well-established Chinese automakers have successfully sustained a market share of approximately 36-39% over the past three years.

China’s automotive landscape is no longer a fertile ground for easy profits. In order to secure their market share, OEMs are engaged in a fierce battle, marked by the introduction of record-breaking numbers of new models in 2022/23 and a recent “price war.”

To address this, we have meticulously analysed the building blocks that Chinese OEMs have established to ensure their future competitiveness in China, Europe, the US, and other export markets, as well as the challenges they may face in the coming years.

While Chinese OEMs showcase their potential, international automakers can still emerge victorious by leveraging superior technologies, undertaking successful transformations, and placing a greater emphasis on (digital) user experience. This calls for a well-defined turnaround plan for the next five years, aligning with the rapidly evolving automotive landscape.