VW And Toyota Dominated For Decades. Now It’s China’s Time
Chinese brands are scaling up global output, cutting into Toyota and VW’s share as Tesla gains ground. Analysts say the map is already redrawn.
https://www.carscoops.com/author/bradcarscoops-com/
by Brad Anderson
Localization will help Chinese carmakers boost global vehicle sales.
VW and Toyota’s market share could fall sharply in key segments.
Analysts expect Tesla’s share to rise from 2 to 8 percent globally.
In just a few years, Chinese automakers may do more than disrupt the global car industry. As they scale up overseas and lean into their strengths in electrification and cost control, the shift looks less like a disruption and more like a permanent redrawing of the map. If the current pace holds, they could control a third of the global market within five years.
Read: One In Ten Cars Sold In The UK Now Comes From China
Analysts at UBS, the Swiss investment bank and financial services company, point out that while China’s domestic car market continues to grow, it’s the overseas expansion that’s becoming increasingly important for them. According to their latest estimates, foreign markets now represent about 20 percent of industry sales for Chinese carmakers, and in some cases, up to 50 percent of their profits.
The Global Impact of Expansion
UBS says its forecast remains unchanged from two years ago, even as Chinese manufacturers scale up production in Europe and some legacy automakers begin stepping back from their EV plans, citing uncertain returns and cooling demand.
“The main drag was due to Europe’s slowdown of EV adoption, and tariffs and protectionism against Chinese EVs,” said Paul Gong, UBS’s lead analyst for Chinese EVs. “I think 2024 progress was slower than expected, but recent signs have shown some catch-up.”
The South China Morning Post (SCMP) reports that China’s long-term bets on electric vehicles, vertical integration, and aggressive supply chain development appear to be paying off. These moves haven’t just given Chinese brands a cost advantage, they’ve made it easier to scale production and respond quickly to market shifts.
Chinese Carmakers Gain Speed as Global Rivals Lose Ground
Frank Diana, a managing partner at Tata Consultancy Services, says China’s edge is not just about scale but about speed. “The fact that [China] has been learning aggressively means that they’re going to have a dominant position and market share,” he explained. “But they’re not alone … you will see the rise of other players in the space.”
UBS forecasts that the rise of Chinese brands will cut deep into the dominance of current global leaders. Combined, Volkswagen and Toyota now hold 81 percent of the market share in key segments. By 2030, that number could drop to just 58 percent. Meanwhile, Tesla’s global share, currently sitting at around 2 percent, could grow to as much as 8 percent by the same year.
Also helping Chinese brands expand internationally is a move to localized production. In Thailand, automakers such as SAIC Motor, Great Wall, BYD, GAC, Changan Automobile, and Chery already operate assembly plants. Great Wall and BYD have also established manufacturing in Brazil, with BYD developing a large-scale facility in Hungary to support its growing footprint in Europe.
India Eyes a Bigger Role
China isn’t the only nation that could see its car industry expand rapidly by 2030. India, too, is positioning itself for growth. Domestic automakers like Tata and Mahindra are increasing their share in the local market and looking outward.
However, they face stiff competition, not only from dominant player Maruti Suzuki, but also from Chinese-owned MG Motor, which has introduced several new models to Indian buyers. BYD has also begun to establish a presence, and both Chery and Great Wall have plans to enter the market, reports SCMP.
Still, analysts suggest that China’s early investments gave it a lasting edge. The ability to learn quickly, build tightly controlled supply chains, and manage costs efficiently has kept its companies ahead.
“The EV supply chain is dominated by Chinese companies,” said analyst Ramakrishnan. “The India EV supply chain, including electronics, is imported from China.”
Fewer Players, Bigger Stakes in the Next Phase of EVs
In Diana’s view, the current market is heading toward consolidation. China’s early lead puts it in a strong position as the EV space matures into a more concentrated field of major players.
“So there will be consolidation even at the EV market level, and you end up with 10 to 15 platform orchestrators made up of [original equipment manufacturers and] big technology companies,” he said.
