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China’s top automakers begin to challenge Japan’s strongholds

China's top automakers begin to challenge Japan's strongholds

SHANGHAI – The major automakers in China only started making cars in the late 1990s and early 2000s.

After steadily improving engineering, design and quality while adding economies of scale, more recently, electric vehicles are targeting two key segments that have long been dominated by Japanese brands: China’s gasoline-electric hybrid market and major auto markets. in Southeast Asia.

They are starting to deliver results on both fronts.

hybrids

The hybrid segment of the Chinese car market has long been the preserve of two major Japanese car manufacturers: Toyota Motor Corp. and Honda Motor Co.

But the balance is now changing six major Chinese automakers – Geely Automobile Holdings, Great Wall Motor Co., GAC Motor Co., Changan Automobile, Chery Automobile Co. and Dongfeng Motor Group – have launched a wave of hybrids since the third quarter of this year. 2021.

GAC has obtained key hybrid technology from Toyota, a joint venture partner, while four of the other automakers claim to have developed hybrid powertrain systems themselves.

The Chinese automakers have set ambitious plans to adopt hybrid powertrain systems in their product lines. They rely on hybrids to complement their EV and plug-in models to meet China’s increasingly stringent fuel efficiency standards.

Under the rules of the central Chinese government, passenger car manufacturers must reduce their fleet-wide fuel consumption from 5.0 liters per 100 km (75.7 mpg) in 2020 to 4.0 liters per 100 km (94.6 mpg) in 2020. 2025.

Of the six companies, Geely, the largest privately-owned Chinese automaker, has the most ambitious plans to expand into hybrids. It says it will introduce more than 20 hybrid models from 2021 to 2023.

After the first Geely-badged hybrid – a petrol-electric version of the Emgrand compact sedan – launched in April, Geely began selling the first hybrid under its premium Lynk & CO brand last month. The vehicle is a hybrid variant of the Lynk & CO 01 compact crossover.

As challenger brands, Chinese automakers hope to use lower prices to gain a foothold among hybrid shoppers.

For example, the hybrid version of the Geely Emgrand compact sedan costs less than 171,700 yuan ($19,260), while the hybrid Toyota Corolla has a starting price of 207,800 yuan.

Japanese brands control a lion’s share of the hybrid vehicle market in China. Some 91,239 hybrid vehicles were sold nationwide in June, of which 80,851 were produced by Toyota and Honda, according to the China Automobile Dealers Association.

But domestic automakers are pushing through. Last month, hybrid vehicle sales in Geely and Great Wall reached 3,170 and 2,263 respectively.

More major Chinese brands are preparing to roll out hybrid vehicles.

Wuling, China’s largest minibus brand, announced on Thursday that it has developed its first ‘people’s hybrid’. That means the vehicle will be affordable for the average Chinese family. Details were not revealed.

South East Asia

China’s automakers launched electric vehicles from 2010, well ahead of global rivals. In the first half of the year, they captured 40 percent of the country’s electric car market, the largest in the world.

Outside of China and in Southeast Asia, Japanese brands have long dominated urban streets and highways. But that landscape is starting to change.

Aware of their shortcomings in competing with Japanese rivals in the petrol car market, Chinese automakers are exploiting their lead and advantage with EVs to enter Southeast Asia’s key auto markets.

The strategy is yielding some early successes. Most of the electric cars sold in Thailand now are products of Chinese car manufacturers. They include EVs from Great Wall and SAIC Motor Corp., which are produced locally, as well as imports from BYD Co., China’s largest electric vehicle manufacturer.

Chinese EV makers are gearing up to expand further in Southeast Asia.

Great Wall opened a sales outlet in Malaysia last week, while BYD added its latest EV model, the ATTO 3 compact crossover, to its product range in Singapore.

The combined share of Chinese automakers in the Asian EV market, excluding China, is on track to rise to nine percent by 2023, from four percent in 2021, LMC Automotive, a market advisor, predicted earlier this year.

So far they check the key boxes to get there.