Why China’s Automobile Industry Overtakes Others in A Corner?


China has surpassed Japan to become the world’s largest automobile exporter for the first time. What does this mean? In the past year of 2023, several landmark events have occurred in China’s automobile industry: First, China’s annual automobile export volume exceeded 5 million units and ranked first in the world. Second, for the first time in history, a Chinese brand appeared in the top ten automobile companies in global automobile sales – BYD. Third, eight of the top ten brands in China’s new energy vehicle market in terms of annual sales are independent brands. Fourth, there are already 13 Chinese companies among the top 100 global auto parts companies, and CATL is among the top 5. China has made a series of original innovations in new automotive energy technology, intelligent technology, and advanced manufacturing technology. These landmark events all reflect a fact that makes the Chinese people proud: China’s automobile industry is accelerating from large to strong and overtaking in corners!

1. Why Does China’s Automobile Industry Take a Curve to Overtake?

Since the birth of the automobile industry 120 years ago, the competitiveness of automobile products is highly dependent on scale advantages and technological advantages. In the past ten years, a competitive landscape has been formed that is dominated by the automobile powers of Germany, Japan, the United States and South Korea, followed by France, Italy, and China. However, the automobile industry chain is in the historical process of rapid transformation from traditional fuel vehicles to electric smart vehicles, and the technological focus and industrial core of the global automobile industry chain are undergoing fundamental changes. China is the most important promoter of this round of technological transformation. The 863 major new energy vehicle project spans the two five-year plans of the “15th and 11th Five-Year Plans” from 2001 to 2010, and has achieved a series of results, with a total of With more than 3,000 patents, more than 30 new energy vehicle technology innovation platforms have been established, laying the foundation for new energy vehicle technology. Today’s growth of BYD stems from the development orientation of the national new energy vehicle policy. In 2008, BYD launched the world’s first mass-produced plug-in hybrid model – F3DM, which is equipped with a DM consisting of a 1.0-liter engine and an electric motor. The hybrid system was priced at about 150,000 yuan at the time. Since then, BYD has launched a hybrid and pure electric dual technology route. After 15 years of high-intensity R&D investment, it ushered in the highlight moment of entering the top ten global car companies this year. From the early 2008 Olympic Games and the 2010 World Expo to the national “Ten Cities Thousand Vehicles” pilot demonstration of new energy vehicles, to the official implementation of the 2012 energy-saving and new energy vehicle industry plan, car companies have received large amounts of financial subsidies for the development of new energy vehicles. and production, and around 2015, new forces in car manufacturing and entrepreneurship were in full swing. New car-making forces represented by Weilai, Xiaopeng, Ideal, and Leapmotor emerged, which also gave birth to the power represented by CATL. Battery companies have risen rapidly. Today, CATL’s battery shipments account for more than one-third of the global market, making it one of the top five global auto parts companies. It can be seen that the overtaking of China’s automobile industry in the new energy vehicle track is a two-way interaction between forward-looking national policy guidance and the market economy. After nearly 20 years of accumulation, it has achieved today’s results.

2. Why Are Independent Brand Car Companies Accelerating their Rise?

The automobile market is where consumers vote with real money. For large automobile purchases, the vast majority of consumers will not pay for feelings, but for the power of automobile products. Although independent brand car companies are slightly weaker in the core technologies of engines and gearboxes for fuel vehicles, they have made breakthroughs in small-displacement engines thanks to their efforts in recent years, and their vehicle manufacturing capabilities have also been significantly improved. The advantage is that it can better control the price and is extremely cost-effective. It is highly sought after in the global automobile market. Among the more than 5 million vehicles exported this year, exports of traditional fuel vehicles accounted for 75%. Overseas sales of SAIC Motor, Chery Automobile, Great Wall Motor and others are all maintaining rapid growth. In terms of new energy vehicles, independent brand car companies are not rising but completely surpassing them. BYD is the first car company in the world to abandon the production of fuel vehicles and fully embrace new energy. In 2023, its car sales exceeded 3 million units, far exceeding Tesla’s 1.8 million sales, and ranked ninth among global car companies in terms of sales. There is still a lot of room for improvement. According to data from the Passenger Car Association, my country’s new energy vehicle sales will increase by 36% year-on-year in 2023, with retail sales reaching 7.75 million units, and the penetration rate has exceeded 35%. In our country’s vast land, the south is suitable for pure electric vehicles, and the north is suitable for hybrids, even if In Changbai Mountain at minus 30 degrees, the battery life of the BYD Corvette 07 I drove was still excellent. If we look specifically at models in different price ranges, self-owned brand new energy models have highlights in appearance design, power performance, interior configuration, smart cockpits, and smart driving, and are gradually beating joint venture competing models in every price range. BYD Han, Seal, Zhiji LS6, Xpeng G6, Weilai ES6, Ideal L7, Wenjie M7, Fangmao 05, Yangwang U8, etc. are all making history in their respective market segments. Looking up to the U8, a high-end luxury car that has exceeded one million, the monthly sales volume in December reached 1,593 units. This is truly making history. Car consumption is a long-term decision-making consumption. The rise of independent brand car companies is a real increase in product strength and a significant improvement in technological level. It is by no means hijacked by so-called national sentiments.

3. What Opportunities Will There Be for the Automotive Industry in the Future?

There are 32 developed countries in the world, but the only recognized automotive industry powers are Germany, Japan, and the United States. The automobile industry is the master of the manufacturing industry. The three major automobile industry powers, with complete vehicles as the core, upstream auto parts, and downstream the aftermarket, have created trillions of dollars in value and created millions of high-paying jobs. China will achieve 30 million complete vehicle production in 2023, with domestic consumption of 25 million vehicles and 5 million vehicles exported. The automobile and its upstream and downstream industries already account for more than 10% of GDP. The “Top Ten Chinese Automotive Technology Trends in 2024” report released by the China Society of Automobile Manufacturers shows that China has played a leading role in the world in battery technology, motor technology, intelligent driving technology, intelligent manufacturing, etc., with many original innovations. Reached the world’s leading level. In the last two months of 2023, Huawei has achieved a reversal in its reputation in the automotive field with just the Xinjie M7, Zhijie S7, and Wenjie M9. The order volume on hand exceeds 200,000, and the sales of the Wenjie M9 exceed 500,000. Price, 2 hours after listing, the order exceeded 10,000, and the order exceeded 30,000 within a week. Now the order has exceeded 60,000. Xiaomi Motors held a technology conference at the end of last year, bringing the full ecological technology concept of the car family and making a comprehensive breakthrough in integrated die-casting technology. Both online and offline are paying attention to the performance parameters and sales of Xiaomi’s first car, SU7. price; NIO also released the ET9, a smart electric executive flagship sedan priced at 800,000 yuan, on NIO DAY at the end of the year, bringing a series of shocking technological innovations. In terms of industrial development, the automobile industry has taken over from real estate and become the new pillar industry in the country; in terms of technological innovation, independent brand car companies have also become more hard-core and attracted more high-level talents for employment. The “new four modernizations of automobiles: new energy, electrification, networking, and sharing” are full of imagination. According to the general rules of the development of the intelligent terminal industry: hardware – software – network – platform, the current hardware is gradually converging. Some companies stand out, and software begins to define cars. It is difficult to predict what kind of platform giants will be born with the support of the Internet of Vehicles in the future, but the life changes will undoubtedly be huge, and there will be many opportunities.

Looking back at 2007, there was a global economic crisis, but the emergence of smartphones spurred a decade of great development of the mobile Internet. A series of giant companies were born, and China’s mobile phone industry and related consumer electronics industries rose in an all-round way. In the current international environment, with storms about to come, new energy smart cars will undoubtedly be the industrial highland in the next decade, and will link up a wider range of industries such as energy, manufacturing, networking, and electronic information. Now that China has more advantages, it is likely to drive the overall rise of my country’s manufacturing industry.