Posted on 09/28/2023 7:08:46 PM PDT by FarCenter
SHENZHEN, China/TOKYO -- The rise of electric vehicles in China is fueling a shakeout in its auto market, uprooting players lacking the wherewithal to keep pace while the government bolsters a select few companies in its bid to make the country an automotive powerhouse.
The mounting challenges of the Chinese market, with a cooling economy driving a race to the bottom on prices, have been underscored by Mitsubishi Motors' decision to withdraw from Chinese production.
"There were no guarantees that we could turn a profit in a market as competitive as China," a Mitsubishi executive said. "We might have worsened the bleeding by trying."
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The intense competition has coupled with the spread of new energy vehicles -- with EVs now accounting for 30% of new-auto sales -- to shift the industry's balance of power. Japanese automakers' share of the Chinese market has fallen from around 20% in 2020 into the teens.
Chinese automakers have also improved on quality. Initial problems per 100 new vehicles for Chinese brands decreased from 212 in 2012 to 101 in 2019, according to J.D. Power, putting them within striking distance of foreign brands.
In this competitive environment, midsize automakers are scaling back or restructuring Chinese operations.
Mazda Motor has stopped outsourcing local production to state-owned China FAW Group and has reorganized its dealership network in the country.
After withdrawing from Chinese production, Mitsubishi Motors plans to have state-owned joint-venture partner GAC Group use its plant as an EV production base. South Korea's Hyundai Motor has decided to sell its Chongqing plant.
Companies are also reworking their development structures. "Doing everything from scratch in Japan would be difficult," Nissan Motor President and CEO Makoto Uchida has said. The automaker will switch to a system where the EV strategy is led and managed in China, using affiliates of Dongfeng Nissan, a joint venture with state-owned Dongfeng Motor Group.
GAC Toyota, a joint venture between Toyota Motor and GAC Group, laid off 1,000 employees in July to streamline its development operations.
Unlike gasoline-powered cars, where Japanese companies have long held a supply chain advantage, Chinese companies control the supply chain for important EV parts, including batteries. "Even if we invest in EVs, it's hard to see a path to beating Chinese competitors," an executive at a major Japanese automaker said.
Still, China is an essential market for researching the latest technology, evidenced by the self-driving taxis around the country. "Withdrawing from the Chinese market would be unthinkable," an executive at a major European automaker said.
What’s Biden’s cut for all these Chinese EVs ?
battery cars
Whatever he can charge...
This article uses terms that have nothing to do with reality. Market, Competition, Profit.
C’mon, Man!
These terms are ridiculous. It reminds me of the insanity of HusseinCare (the destruction of health care). Hussein lied about almost everything. He used the terms competition and choice, when there was no such thing. They adopted free market phraseology where there was no freedom. The Gold, Silver, Bronze ‘categories’ all had the same requirements, mandates, etc.
There have been YouTube videos smuggled out of China that show thousands of new EVs rotting in fields.
PS. A car company in Germany just announced that they are halting production of several EV models. If you read into the details, it turns out that government subsidies have ended. There is no real market. Most EV purchasers have several cars, and the $$$ to purchase them. You and I, all the taxpayers, are funding part of every purchase.
Car companies that are wise enough to stay out of the EV maelstrom will eventually laugh all the way to the bank. It’s a foolish technology, and a fool’s game to risk your company’s future in it.
Mitsubishi Motors’ parent corporation has a number of subsidiaries in the energy sector - including companies that design, build and operate hydrogen motor fuel generating stations, already being tested in Japan. Like Toyota, they believe that fuel cells are more likely to be the winner over straight battery power storage.
The hydrogen support structure isn’t even initially started. Unless we can get a hydrocarbon based fuel, this will mean 1,000’s of psi tanks of hydrogen gas in every vehicle. Not ideal. Then energy density becomes an additional issue.
Govt needs to take a backseat to innovation. When the tech makes the case, the best product will naturally win. Fewer moving parts is a big plus. But the EV isn’t for everybody, everywhere. When it is; the consumer will let industry know
Govt thought CFL was the winner; and tried to dictate something that we all knew was a bad idea. Today, we will seek out the best solution for our need, whether it’s LED, Xeon, incandescent or fluorescent- we know what we need
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