The Chinese auto industry becomes a worthy competitor to European brands
For a long time, the Chinese auto industry was not considered a serious competitor to manufacturers from Europe and the United States. Cars from China were of low quality and failed all the crash tests. However, the Chinese car industry has been actively progressing in recent years, and now it occupies a worthy place not only in the domestic but also in foreign markets.
For the first time, representatives of Volkswagen officially announced the success of Chinese manufacturers in 2021. They acknowledged that the Chinese car industry has seriously improved electronics and manufacturing quality, which allowed it to increase its market share in Europe.
Another threat to big-name brands is the fact that their sales in China are rapidly declining. For example, BMW, Volkswagen, and Mercedes-Benz have a local market share of about 30-40%, but this figure is declining, while sales of Geely, Xpeng, and Nio are steadily increasing. According to experts, the progress of China’s automotive industry is due to the fact that its representatives quickly respond to modern trends and adjust to the new rules that reign in the world.
The philosophy of industry leaders can be clearly seen in the example of Gelly and its head Li Shuf. The businessman views his activity not from the point of view of a single industry, but of a large technological corporation, whose direct competitor will soon be the IT giants Alibaba, Apple, and others. This position gives the opportunity to act, analyzing the situation from a different angle, and taking into account future trends.
The head of Geely emphasizes modernization as one of the main points in his work. In addition, he actively cooperates with other manufacturers. For example, the Chinese concern bought the Swedish manufacturer Volvo for 1.8 million dollars. Moreover, the deal took place at a time when the company was experiencing difficulties, but the new management managed to pull it out of the crisis. Volvo transformed some of its processes and started producing new hybrid and all-electric models.
It should be noted that Geely and Volvo owe their development to modern equipment. The digitalization of the Chinese automotive industry was achieved when its representatives signed a strategic cooperation agreement with Baidu Corporation in 2019. Thus, the companies received excellent tools for the implementation of artificial intelligence technologies in the production of cars.
In addition, the partners began to actively develop the direction of autonomous driving, which is extremely promising. Thanks to this, Volvo’s sales doubled from 2010 to 2019, and in 2021, the concern entered the stock market again. At that time, it sold a 15% stake in the Swedish manufacturer, for which Geely received $2 billion.