Global automakers are adapting China strategies due to slowing sales. China, the world’s largest auto market, faces challenges like economic growth slowdown, electric vehicle transition, and local brand competition.
In H1 2023, passenger car sales dropped by 7.8% YoY – first decline in six years. Foreign automakers’ market share decreased from 45% (2018) to 38% (2023). To combat this, they invest in EV models, partner with locals, and enhance customer service.
Despite challenges, China remains the world’s biggest auto market with growth potential. Success requires automakers to adapt their strategies accordingly.
Here are some of the specific strategies that automakers are adopting in China:
- Investing in electric vehicles: Many automakers are investing heavily in electric vehicles (EVs) in China. This is because the Chinese government is offering generous subsidies for EVs, and the country is seen as a key market for the future of EVs.
- Partnering with local companies: Some automakers are partnering with local companies to develop new products and services. This is a way for them to tap into the local market knowledge and expertise.
- Focusing on after-sales service: Automakers are also focusing on improving their after-sales service in China. This is because Chinese consumers are increasingly demanding high-quality service.
- Rebranding: Some automakers are rebranding their China operations in an effort to appeal to local consumers. For example, General Motors has rebranded its China operations as “Wuling”.
