Chinese Car Makers Could Be Ready To Take Down America’s Auto Titans – Watts With It?

From THE DAILY CALLER

NICK POPE
CONTRIBUTOR

American automakers must make major changes to their businesses if they want to remain competitive with China’s electric vehicles (EVs) that are poised to flood the global market, according to an analysis published by an automotive industry consultant.

US manufacturers now do tens of billions of dollars of business overseas, but Chinese competitors are poised to take about a third of global market share by 2030 with particularly strong growth in Europe, South America and Asia driven by EVs and plug-ins. hybrid, AlixPartners project in the report.

The car market is growing in favor of EVs due to some policy choices of the Biden administration and other Western governments, and the consultation concluded that American companies will have to change their ways from “business-as-usual” practices if they don’t want to. left

“The global auto industry has been shaped by several inflection points over the past half century, including the rise of Japanese production techniques in the 1970s, then the rise of Korea, and the more recent disruption caused by Tesla,” said Mark Wakefield, global co-head of automotive and industrial practice in AlixPartners, said the analysis. “China is the new disruption in the industry – it can create must-have vehicles that are faster to market, cheaper to buy, advanced in technology and design, and more efficient to build. For traditional (manufacturers), align with the strongest brands in China need more course correction. (RELATED: ‘Existential Problem’: US Auto Titans On Edge As Competition Rev Up Cheap Chinese Electric Vehicles)

Special advantages for Chinese manufacturers include a 35% production cost advantage that allows flexibility to reduce the impact of tariffs, a faster design cycle and a focus on providing drivers with advanced technology features that improve user experience, among others, according to the AlixPartners report. . These advantages cumulatively give Chinese automakers the edge over American competitors in emerging markets.

BYD, China’s largest automaker, has begun examining options to penetrate the American market through Mexico, and critics of the Biden administration’s EV push have repeatedly expressed concern that the approach could backfire by strengthening Chinese production that could undercut the industry’s biggest players. American. . Government concerns about the capabilities of Chinese companies, as well as unfair trade practices, led the federal government to impose or strengthen tariffs on EVs, EV batteries and other related products in May.

The Biden administration has passed a series of tough regulations for light, medium and heavy-duty vehicles in recent months, including one that requires manufacturers to ensure that EVs make up 56% of new sales by 2032, with an additional 13% of sales being plug-in hybrids in the same year. In addition, the administration is spending billions of dollars to advance EV adoption, production and infrastructure, but major American companies are losing a lot of money in their electric product lines when consumer demand doesn’t show up as advocates hope. .

“Automakers hope to continue operating on the business-as-usual principle in for more than just a rude awakening – they are headed for obsolescence,” Andrew Bergbaum, global co-leader of the automotive practice and industry at AlixPartners, said. “The revolution taking place in the global auto industry is driven by the incredible and unimaginable maturity of Chinese automakers who are doing some things differently.”

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available at no cost to legitimate news publishers who can provide a large audience. All republished articles must include our logo, reporter’s byline and DCNF affiliation. For any questions about our guidelines or partnership with us, please contact licensing@dailycallernewsfoundation.org.