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The rise of China in the car industry

In many of our articles, we point out that it is possible to buy (almost) anything from China; in fact, we often comment that most of the products we see in our daily lives are imported from the Asian Giant. However, there is one industry that, until recently, seemed to shun Chinese manufacturing: automotive.

But this is changing. The automotive sector is already rewriting its history under the weight of this great Asian country. Gone are the days when China was seen only as a consumer market for vehicles. Today, it has established itself as a powerhouse in car manufacturing, innovation and exports, to the point that the best-selling car in Spain in August was a model from the Chinese brand MG.

With its ZS model, an urban SUV, MG has become the first Chinese brand to lead sales in Spain. These emblematic acronyms, once British, are now backed by SAIC, Volkswagen’s main partner in the Asian giant.

This is not just an anecdote. The presence of Chinese cars in Europe is on the rise. In fact, a few days ago BYD Auto confirmed the arrival in Europe of Denza, its high-end car brand, which will start to be marketed in Europe with the Denza D9, a pure electric MPV.

Growth of the Chinese car market

Rapid adaptation to the global market is an undisputed Chinese strength. But what has happened to make such an important industry take off so quickly and so strongly?

First of all, we have to talk about domestic demand: the 21st century has seen demand for automobiles in China soar to unprecedented levels. This boom is attributed to factors such as sustained economic growth, rapid urbanisation and an expanding middle class with increasing purchasing power. In addition, Chinese consumers’ tastes are evolving, seeking more sophisticated and environmentally friendly vehicles.

On the other hand, the government’s drive towards electrification has positioned the Asian country as a leader in electric vehicle manufacturing. The Chinese government has established aggressive policies and incentives to encourage the production and adoption of electric cars, seeking to reduce pollution and rely less on imported oil.

While China has gained experience in manufacturing vehicles for its citizens, it has also learned the demands and tastes of European consumers and has adjusted its designs and technical features to our markets. The focus on sustainability, with low or zero environmental impact models, coincides with the growing European demand for environmentally friendly vehicles.

Innovation, challenges and opportunities

China is not just making and consuming cars; it is revolutionising the way they are conceived. The Asian Giant is doing a great job in the transition to electric vehicles, which has already led to important milestones such as the first 5C battery car: it charges 300 km in just five minutes.

The examples are many: companies such as Baidu and Tencent are advancing autonomous driving technologies and vehicle connectivity solutions. The integration of artificial intelligence, big data and connectivity technologies in the automobile is positioning China as a leader in the autonomous and connected vehicle of the future, as has already happened in many other sectors.

China, over the last decade, has positioned itself not only as the world’s largest automotive market, but also as a major player in defining the trends and technologies shaping global mobility. However, despite the usual good value for money, penetration in established Western markets presents multiple challenges: trade barriers, strict regulations and competition with traditional brands.

In this context, we dare say that the future of automotive in China will not be easy, but not impossible. Our experience in importing has taught us that China is always capable of adapting its strategies to conquer key market niches for further development.