It won't be news It has been charged don't read that Chinese automakers have used “Western” products in the EV race. The US and the EU set up tariff walls in a last-ditch effort to save domestic automakers from their decade-long failure to adapt, but they can't control what happens outside their borders. The markets of Asia, South America and Africa may be small compared to North America and Europe, but when combined they add up.
Michael Dunne knows as much about the Chinese car market and car manufacturers as anyone there. In a recent article, he warns that China has launched a “global automotive blitzkrieg” that puts the status of American, European and Japanese automakers as global companies at grave risk.
China will export about six million cars to more than 100 countries this year, making it the world's leading car exporter. The average price of these cars made in China is $19,000, less than half of the average price in North America or Europe. (An often-overlooked point is that these aren't just EVs—the Chinese are shipping gas-guzzlers too.)
In Thailand, Japanese brands have dominated for decades, with a market share of around 90%. Now every Japanese company is seeing sales decline. Honda recently closed a factory in Thailand, and Suzuki has completely exited the market. Meanwhile, BYD's market share grew to 5%. A Bangkok auto veteran recently told Dunne that he gets quotes from Chinese automakers all the time. Another offered to deliver a replica Ford Territory for $8,000. (The original Ford Territory sells for $32,000 in Thailand.)
In Brazil, the world's sixth-largest auto market, Chinese automakers shipped 175,000 vehicles in the first half of 2024. Chevy, Jeep and Fiat collectively saw their sales in Brazil drop by 125,000 during the same period. The head of a group of traders in Sao Paulo told Dunne that “strong prices and good products” from Chinese companies are paving the way for further growth.
“Competitors in Japan, Europe and America seem unresponsive,” Dunne wrote. “They are confused and overwhelmed by the speed and power of the Chinese attack.”
China's invasion is motivated by many factors, including subsidies at all levels of the supply chain and production capacity far greater than is needed to operate China's domestic market (“unfair trade competition” claimed by Western governments to justify tariff hikes). Car manufacturers BYD and SAIC even have their own fleet to transport their cars around the world.
Mr. Dunne concludes his latest essay with “the question of the year: If China can jump from 1 million exports in 2020 to 6 million in 2024, what will stop China from exporting 12 million a year by 2028…and breaking 100 years of the West to dominate the car?”
Source: Dunne Insights