For all the talk of China’s car industry being crowded with low-volume brands that struggle to turn a profit, the potential to carve out a share of the world’s biggest auto market is still proving irresistible for new entrants.
Whether with in-car kitchens or plans to take on one of the world’s fastest supercars, Chinese companies are still betting they can offer vehicles that are unique and innovative enough to build businesses around. That’s despite a gloomy medium-term outlook as competition intensifies and Beijing reins in the sprawling industry. AlixPartners estimates that by 2030, just 15 of the 129 brands in China that sell electric and plug-in hybrid vehicles will be financially viable.
While that points to significant consolidation in the sector as an aggressive price war squeezes automakers, suppliers and dealers, it’s also an opportunity for companies that can fulfill niche demands. Instead of scrutinizing fuel economy, Chinese drivers are increasingly eyeing models with novel add-ons or luxury cars that sell for far less than a legacy Western marque.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.