In the middle of a big change towards electric vehicles (EVs), China's auto industry is going through a big shift with lots of challenges and chances. Once busy factories now sit empty or run much less than before, showing how the market is quickly moving away from internal combustion engines. As old carmakers deal with this change, new ones are coming up, using new ways to make cars. In this article, we look into the rise of 'zombie' car factories, the tough competition in the EV world, and the plans changing China's car future.
Chinese consumers are rapidly turning to electric vehicles, causing a decline in sales of internal combustion engine (ICE) cars. This shift has led to a significant decrease in the production of ICE cars in China, with many factories facing closure or repurposing.
How are legacy carmakers, both foreign and domestic, responding to the shift towards electric vehicles in China?
Legacy carmakers are facing challenges adapting to the shift towards electric vehicles in China. Foreign companies, such as Hyundai, are experiencing declines in sales of internal combustion engine cars and are either selling off factories or exploring alternative markets like Russia. Additionally, companies like Volkswagen are investing more in the Chinese market and increasing their efforts in EV production. However, they face obstacles such as the lack of charging infrastructure in smaller cities.
What challenges and opportunities do Chinese carmakers face in exporting petrol-powered cars to markets like Russia?
Chinese carmakers are increasing exports of petrol-powered cars to markets like Russia in response to the declining domestic market for internal combustion engine vehicles. However, analysts question whether these strategies will make enough money in the long term. While exporting to Russia may give short-term chances, it's not clear how long this trend can keep going or if other developing markets can handle Chinese non-EV exports. Additionally, foreign brands are also thinking about exporting from their Chinese factories, risking hurting their own factories in other markets.
Another key aspect is the rise of new manufacturing approaches in the Chinese EV industry. Nio's factory in Hefei, for example, demonstrates a departure from traditional mass production methods. The factory offers customizable features across its different EV models and boasts a shorter delivery time compared to traditional car manufacturing processes. This shift highlights the importance of innovation and flexibility in meeting the evolving demands of the Chinese automotive market.
In summary, China's auto industry faces significant shifts towards electric vehicles, with challenges and opportunities emerging for both established and new players. The transition away from internal combustion engines is evident in the rise of 'zombie' car factories and the need for innovative manufacturing. Despite obstacles like infrastructure gaps and uncertain export markets, success in this evolving landscape will depend on adaptability, innovation, and strategic vision.
Source > ft.com