Dozens of cutting-edge Chinese carmakers displayed their prowess at the world’s largest auto show in Shanghai on Wednesday — but not all will survive the country’s brutal domestic market, executives said.
Beijing’s historic backing of EV and hybrid development has seen over a hundred Chinese brands emerge in a relatively short space of time, all jostling for a piece of the world’s largest auto market.
That fray is credited with fostering speed and innovation, but the effect on individual companies can be harsh.
“It’s a very competitive field,” Xpeng’s co-president Brian Gu told AFP at the startup’s booth, where as well as cars, a humanoid robot and a concept flying car were on display.
“Not every player here will ultimately survive because the criteria to succeed is much higher than before.”
As well as mastering hardware, engineering and manufacturing at scale, companies now need to be pioneers in the fields of AI, software and predicting the future — “how to build a car for the next generation”, Gu said.
Some startups have already gone bust, while brands including SAIC Motor, BYD and Geely are engaged in a brutal price war.
“We’ve gone through a survival of the fittest phase,” Zhu Jiangming, chairman of Leapmotor, told media.
“The preliminary round is now over,” he said. “In the next stage, competition will intensify even further, entering what you might call the finals.”
Of the startups that entered the market around 10 years ago, Zhu said, Leapmotor, Xpeng, Nio and Li Auto were in the strongest position.
But new competitors had since entered the fray, he added, such as consumer electronics giant-turned-carmaker Xiaomi, as well as international rivals.
The market was “extremely intense”, Nio’s president Qin Lihong told AFP.
Companies had to make sure they excelled in all areas — technology, marketing and long-term thinking.
“I believe there’s no single silver bullet for any company to guarantee victory in this race,” he said.
All three men, though, insisted their company had what it took to come out on top.
“I would think that the industry will continue to consolidate,” said Gu.
“The top five to seven players will have the lion’s share of the market, whereas now you have dozens of brands here. And in that process, the company that truly possesses the full stack capability will thrive.”
