Automotive News Europe — 2024-05-01
Automotive Industry
Foreign automakers seek to reverse against their continuing loss of market share in China to domestic automakers.
Foreign brands unveiled a slew of new models at the 2024 Beijing auto show as they seek to reverse against their continuing loss of market share in China to domestic auto companies.
Volkswagen, General Motors, Toyota, Nissan, Honda and Mazda were among Western brands that brought eye-catching new metal to the show to capture the attention of Chinese buyers, many of whom have shifted their loyalty to domestic brands, particularly when it comes to EVs.
"They did not show up in Shanghai in 2023, but the foreign brands tried to make their presence known this year," Tu Le, managing director of consultancy Sino Auto Insights, told Automotive News Europe.
European and Japanese automakers are also looking for new partnerships with Chinese automakers or to deepen existing tie-ups to get quicker access to technology that has been driving the success of domestic brands such as BYD, Changan, Geely, Aion and Li Auto.
Toyota said it will partner with Chinese gaming and social media giant Tencent on artificial intelligence and big data, while VW promoted its partnership with Chinese EV startup Xpeng.
Foreign automakers lost another 6.5% points of market share to Chinese brands in March, with their share sinking to 40%, a new low, according to data from the bank UBS.
Nissan seeks rebound
Nissan CEO Makoto Uchida highlighted the difficulties faced by Western brands when he unveiled three concept cars for the Chinese market.
"Customer needs and the competitive landscape are all quickly changing. Competition from domestic brands has transformed the market," he said at the show.
Nissan has been one of the Western automakers that have been hardest hit in China by the rise of domestic brands, with its annual vehicle sales in China dropping to 679,966 in 2023 from well over 1 m in recent years, according to data aggregator Bestsellingcarsblog.com.
Nissan has capacity to build 1.5 m cars in China with its partner Dongfeng, according to UBS, meaning that it's currently running at half capacity.
Uchida said Nissan aims to increase its Chinese sales to over a million again by 2026, partly helped by new models previewed by five new concepts, three of which were shown in physical form at Beijing.
Two were full-electric cars and two were plug-in hybrids. Nissan has so far ignored plug-in hybrid technology in favor of battery-electric cars such as the Leaf and E-Power hybrids. Nissan's fifth concept wasn't defined at the show.
Nissan will launch eight BEV or plug-in hybrid vehicles in China by 2026 Uchida said, starting with Epoch all-electric sedan arriving first at the end of the year (2024).
VW's tech leader
VW signaled its intention to win back Chinese customers by unveiling the ID Code concept for a full-electric SUV.
The concept was presented as the face of the automaker's future in China, with interactive lighting, an AI-powered ‘avatar' assistant and Level 4 autonomous capability. VW didn't say if it previewed a new model.
The ID Code is packed with technology "specifically geared towards the needs and wishes of our Chinese customers," VW brand head Thomas Schaefer said at the show.
In a reversal of its long-standing strategy of working alone, VW is now partnering with Chinese companies. It's developing a new electrical architecture with Xpeng and working with software companies Thundersoft and Horizon Robotics.
GM Chinese take
General Motors showed new concepts for the Buick brand -- the Electra LT large shooting brake and related Electra L sedan.
These are GM's take on the sleek EV designs popularized by high-tech Chinese EV brands such as Zeekr, Nio, Xpeng and newcomer Xiaomi.
The concepts also sought to maximize the technology that has proved so popular with China's younger car buyers.
The Electra concepts have seven screens, Level 2-plus driver assistance, light sensitive panoramic sunroof and AI-powered digital interaction in the cockpit.
GM also showed new plug-in hybrid versions of its GL8 minivan, a best-seller in China, and the Equinox SUV.
"Over the long-term, we're committed to China," GM CEO Mary Barra said on the company's earnings call on 23 April 2024.
Honda's Tesla rival
Honda unveiled the E:NS2 battery-electric hatchback that it said would compete with the Tesla Model 3 sedan. The E:NS2, which has a 68.8-kilowatt hour battery pack, will be sold at an initial launch price of 159,800 yuan (€20,500) before taxes, Honda said.
At that price Honda is losing 50,000 yuan on each car, one employee told Automotive News Europe on condition of anonymity.
"It's an unbelievable price, but that's what we have to do to compete in the market," the person said, referencing the market's ongoing price war.
Honda was China's fourth-biggest carmaker last year with sales of 1.2 m cars, down 14% on the year before.
Honda also previewed the new Ye subbrand it will use for electric models going forward, starting with the Ye P7 large electric SUV due on sale in 2024. It also showed the Ye GT concept.
Mazda's survival fight
Mazda showed the new EZ-6 full-electric and plug-in hybrid midsize sedan due at the end of the year (2024), as well as the Arata SUV concept.
Mazda is fighting for survival in China after selling just 88,564 cars in the market last year according to Bestsellingcarsblog.com, down from a peak of 309,000 cars in 2017. Rival Japanese automaker Mitsubishi Motors decided to end China production in 2023 after sales slowed.
Toyota bets on BEVs
Toyota has maintained its market share in China mainly on the strength of its combustion engine lineup, but the automaker showed two new electric models in Beijing to address its lag in EVs, a problem common to most foreign automakers.
The bZ3C, a joint development between Toyota, BYD, Toyota's JV partnership with FAW and Toyota's locally sited r&d center, is a low-slung crossover.
The bZ3X is a larger electric SUV developed with Toyota's other JV partner GAC. Both models were first previewed by concepts at 2023's Shanghai show.
Even when foreign brands had no new unveils, they still showed up with a stand and display of models. For example, Ford's stand focused on its import models, the Bronco off-roader and Mustang sports car.
Taking a stand is almost mandatory in China's premier auto show. "You have to do it," said one European executive for a global brand on condition of anonymity. "If you don't people will assume you're dead in 15 months."