The Changing Face of China’s Auto Industry

The automotive industry in China is going through some big changes, and it’s the local car brands that are making the most of the opportunities. This year, we’ve seen a new trend in the Chinese auto market — sales of new energy vehicles from domestic automakers like BYD and GAC Aion are going up, while joint venture brands are seeing a drop in sales or even stopping production altogether.

Mitsubishi Motors from Japan recently announced that it’s going to stop making Mitsubishi-brand vehicles in China and give its share in a joint venture to its Chinese partner, Guangzhou Automobile Group Co Ltd. After the restructuring is done, GAC Mitsubishi’s production capacity will be taken over by GAC Aion, which is an NEV subsidiary of GAC Group based in Guangzhou, the capital of South China’s Guangdong province.

On July 3, GAC Aion made China’s 20 millionth NEV in Guangzhou — a huge milestone for the country’s NEV sector. As the Chinese NEV market keeps growing strong, there are new partnerships forming between foreign and domestic car brands. For example, Volkswagen has agreed to buy a 4.99 percent stake in Chinese electric vehicle startup Xpeng and work together on two electric vehicle models for the Chinese market.

This partnership is a big deal for China’s intelligent EV manufacturing sector and shows that the world’s leading carmakers are recognizing China’s auto-making abilities. The Chinese auto industry has been working hard on improving its innovation capacities in areas like whole vehicles, communication modules, power chips, and other electronic components.

Valeo, a top auto parts supplier from France, opened its Valeo (Shenzhen) intelligent manufacturing center earlier this year. The center expects its sales to keep growing by over 20 percent annually for the next five years. Zhou Song, president of Valeo China, said, “Shenzhen has a strong foundation in the new energy automobile industry, and its resources and advantages in the development of the intelligent car industry give us confidence.”

BYD, a major Chinese NEV company, saw its net profit for the third quarter go up to 10.4 billion yuan ($1.4 billion), an 82.2 percent increase from the previous year. For the first nine months, the net profit increased by 130 percent to 21.4 billion yuan. The company also reported revenue of 162 billion yuan in the third quarter, a 38.5 percent increase from the previous year. In total, its revenue for the first nine months reached 422 billion yuan, a 58 percent increase from the previous year.

Market analysts think that China’s auto consumption potential is still strong, and foreign auto companies have a lot of room to grow in China. In 2022, China’s new energy passenger cars had a 63 percent share of the global market, according to the China Passenger Car Association. Cui Dongshu, the secretary-general of the CPCA, said, “The rise of domestic Chinese car brands shows the high-quality development of China’s automobile industry, especially its more competitive NEVs.”

The automotive industry in China is definitely going through some exciting changes, and it’s great to see the local car brands taking advantage of the opportunities. With the growth of the NEV market and the formation of new partnerships, it’s clear that China’s auto industry is making a big impact on the global stage.