As many as 87 percent of Chinese brands will disappear

Of the 137 Chinese car brands now, only 19 are viable. That means 87 percent of Chinese brands will disappear…

We often write about it, the Chinese are coming. In large numbers. They park ports full of their models and look for the buyer later. They take huge losses per car supported by the Chinese government that wants to show how well the country has become the car factory of the world.

But the big question is whether that is sustainable. Well, no! Research by consultancy Alixpartners (Ali with an x…) reported by AutomotiveNews Europe shows that only about 13 percent of current Chinese car brands will be profitable by the end of the decade. And therefore viable.

Price war

For almost two years now, a price war has been raging that has put pressure on the margins of several Chinese EV brands. As long as big players in the market like BYD and Tesla can keep this up, because they keep a gross margin at the bottom line, the other manufacturers are at a disadvantage.

The average sales price of cars in China itself has fallen by as much as 13.4 percent in the past year, while brands’ margins have increased by an average of 1.5 percent.

However, this is mainly because manufacturers have saved costs. Suppliers have been put under pressure and new models have been put on the market (and the boat to Europe) at a rapid pace. There is not much more to be gained in the near future.

Chinese brands are going to disappear

By the end of 2030, Chinese automakers will have 33 percent of the global auto market and 45 percent of all-electric and plug-in hybrid sales. But that pie will be divided among fewer brands.

For Europe, the forecast has been significantly lowered. If we only look at the European market, the research agency expects a significant drop in market share. From 15 percent to 12 percent. That is due to the additional import tariffs imposed by the EU on Chinese cars.

All told, only 19 of China’s 137 brands will be profitable by 2030. Of those 118 brands, most will disappear or continue to fight for the crumbs of the auto market. Some 87 percent of Chinese brands are therefore not viable.

Comments

1. snail say

   Yeah yeah, go ahead and buy all that Chinese junk on wheels. If you’re unlucky enough to have bought the wrong brand and something breaks down on your car within 5 years, you can kiss your vehicle goodbye. And selling it won’t bring in anything either, because who wants to buy a broken vehicle that no longer has any parts available.
   And in the meantime the Chinese are destroying our market, which means our European brands either have to make crap too or disappear and we have no choice but to buy other Chinese crap on wheels. Well… with all the Chinese but not with this one!
   My car is European and built in Europe (albeit with some Chinese parts, but you can’t do more than your best)

   • hardlearningbv say

     Darling, think of your heart. Very proud of your European car, but buying everything completely EU is simply not possible. For competitive positions, the wages here are simply too high. This development is really not crazy. Maybe you should take a global view of things?

2. RiKe say

   And the European brands are standard too expensive, so what will we have left at the end of the decade? A big increase in costs that will undoubtedly be imposed because the transition to EV is simply pushed through

3. ty5500 say

   I’m not sad about it, we are already waaaaay too dependent on a China that is becoming more and more openly aggressive and collaborating with the greatest threats to the West.