If you are a car brand: leave China!
As you may have noticed, Chinese car brands are very hot. A lot of brands have been added in recent years and the end is not yet in sight. We are regularly surprised with ANOTHER new brand that thinks it has found something good in the market. Without exception, it is a relatively large and surprisingly pricey electric crossover. As if that is the only thing we like in Europe. Or in the United States.
But there is also interest the other way around. The car brands in The Old World are eager to sell cars in China. After all, the market potential is immense (22 million cars annually). Even if you have a very small market share, you can still make large numbers. However, according to a financial analyst, it has been good and Stellantis, General Motors and Ford should pack up and leave China.
Get out of China!
By the way, it is not the least financial analyst, namely the Bank of America. Every year they present their Car Wars report in which they say what (in their opinion) is the wisest thing to do. There are of course a few open doors. For example, car manufacturers must have a clearer model strategy, also in terms of drive types.
Apparently people are still shooting with blanks. By the way, now that we are talking about drive types, car brands really need to focus on reducing the production costs of EVs. They are still too high at the moment.
The most striking advice is that car brands should leave China as quickly as possible. General Motors has a strong brand there with Buick and Ford and Stellantis are also active there. Yet they all have to go.
But why?
First, traditional car brands are losing too much market share in China. Of course compared to the local competition. In addition, margins are becoming increasingly smaller.
Finally, there are the announced additional tax measures. This is a political game that goes back and forth. The Chinese car manufacturers are keen to export and supply in Europe and the US. But yes, that is at the expense of their own industry, so Chinese brands are taxed extra.
China is now making it more expensive for foreign companies to sell cars. So the declining market share of traditional brands in China could well continue to decline. So stay away from China.
Image credit: pink Mondeo by @pinut187 via Car Whiz Spots!
Via: Automotive News
