China’s Car Market Is Too Big for Its Own Good
The last consolidation on a similar scale happened 100 years ago in the US. It offers a valuable lesson.
Stuck in a price war.
Source: AFP/Getty Images
The evolution of the American auto industry holds an important lesson for Chinese carmakers’ deep-pocketed financial backers: Let go and allow the chips to fall where they may.
That message should resonate with the hundreds of thousands of car enthusiasts at the Munich auto show this week. They’ll be coming face to face with a 100-strong contingent of Chinese automakers and suppliers ready to elbow each other aside to increase sales in Europe. Today there are about 150 different brands producing passenger vehicles in China, according to consulting firm AlixPartners, of which about 130 make EVs. The biggest homegrown names are BYD Co., Geely Automobile Holdings Ltd., and Chongqing Changan Automobile Co.