Quick Translation: >BYD PREDICTS A CATASTROPHE WITHIN 5 YEARS: 'MASS FAILURES AND DISAPPEARANCE OF 100 MARKS' >By Roberto "Maz" Mazzu: >BYD predicts a catastrophe within 5 years: 'Mass failures and disappearance of 100 marks' According to BYD's number two, Stella Lì, the future of the Chinese automotive sector is anything but promising. After years of continuous growth, many brands could say goodbye to the market, due to excessive competition. >The result will be that of a championship with fewer teams, only the strongest, which will be able to overcome a real price war. Those who know a little about the Chinese car market know very well that in recent years car manufacturers have fought through impressive discounts. >The cars in the Asian giant have ridiculous price lists and just to give a recent example, the "Chinese Defender" that will soon arrive in Italy, costs less than 24,000 euros. A strategy that allowed companies to sell large volumes but at the same time reduced profitability to mini terms. >If Ferrari earns more than 100 thousand euros for every car sold, Chinese companies are often in the negative and this represents an unsustainable strategy in the long run. There is also another serious problem to deal with: the production capacity of Made in China brands far exceeds actual demand, consequently the sector is facing the first real change after years. >Broad-shouldered brands, such as BYD and MG, will continue their rise, but all the others may disappear. That's why Stella Lì, BYD's number two, predicts a "disastrous future" for the Chinese automotive sector by 2030, convinced that out of the 130 brands currently on the market, "100 could be forced to leave the market", if the price war were to continue. >Obviously even the big brands are not immune from this situation and BYD, in the quarterly results, recorded a decline, thus reviewing margins and forecasts. But for the "Top Players" the disappearance of smaller brands would only be good, taking into account that a more stable market would be created, less competitive and with a reduction in price pressure. Personally, I think he's being optimistic suggesting 30 could remain. I'd suggest less than 10, if they're lucky. BYD, Geely, SAIC...and who do you think else?
I'd add Chery and Changan. Also Maxus, JAC and GWM are quite popular in latin america from my experience, so perhaps them as well.
It sounds like exactly what analysis said since ~2015. 90% bankruptcy prediction in 2030 iirc, we are already ~60% if checking wikipedias list on Chinese EV startups. Also cherry, baic and jac. Can't see these going bankrupt
Disappearance is not the right word imo. They will probably just merge with bigger auto makers. Not that most of them are completely separate right now either. Most of the new brands (inside or outside of china) are sub brands or connect to big companies in some way. We had chinese cars in our country ever since they started so we're quite familiar with old brands and i've never seen a new chinese brand not being connected to any of them. Btw i don't think their competition slows down anytime soon. They might struggle to sell inside china but they still have a lot of opportunities by entering other countries. Once chinese cars hit a market with the right cars and pricing, they'll dominate that market within a year or two. Only auto maker that's able to compete with them is toyota and nissan and that's because of brand loyalty. Toyota cars look like a joke when you compare them with chinese cars.
More than likely there'll be a consolidation within the industry, with the main groups including BYD, FAW, Chery and SAIC becoming bigger giants.
He's not saying anything new. It's the strategy the CCP has implemented in many commercial sectors. When they say car brands are going to disappear, those brands will include European, American, or Japanese ones. They use the capitalist system to destroy capitalism from within. The Chinese know Marxism and know how to apply it to daily life. It's simple.
A lot of brands will simply disappear. In addition there will be mergers and buyouts resulting in conglomerations making multiple brands - but unless the brand have some intangible tied to the name (which in the EV market is unlikely), the name will also disappear.
Xi has stated this many times that there are too many manufacturers and it'll end in s bloodbath with everyone selling below cost (i.e. dumping). But he's so adamant that China will rule the EV world he's willing to let that happen.
>He's not saying anything new I think you mean she. Stella is a woman.
Pretty sure this has happened to ICE cars in the past, so it's really not surprising. Tons of companies fail to get off the ground.
Yes she's right, this is literally how the system works I. China. The CCP sets a Goal, for example lead the world in solar panel manufacturing. The money from the state flows to education, companies, energy everything needed to meet that goal and incentivises companies. Then when they reach and blow past that goal, there's over capacity and it shrinks back down to a manageable sustainable size again. I think it works fairly well. When you don't have to impress a bunch of wall street investors you can really invest and meet these strategic goals. Here in the west, we underfund our R&D unless we remove almost all the risks for these companies to make a bucket load of profit which instead of re investing they use for share buy backs and to buy competitors to enrich themselves all whilst be INCENTIVISED to minimize supply and maximise profit. China is Maximise supply and minimize profit. I personally like the sound of the latter more. Oh and we call that Breaching Trade Rules. Not saying we should be a autocratic state, just a few lessons to be learned in here, aka the Abundance Movement.
Trump is silently implementing lot of Xi economics. Tariff and AI first are protectionist ideas from Xi.
Does anyone have an opinion on GAC Auto? It is state owned, will the government let it fail?
\> Disappearance is not the right word imo. They will probably just merge with bigger auto makers Historically it's a combination -- think of the present like 1915, when steam, electric, and gasoline were in competition with many local brands. Many became aggregated into General Motors, some continued until the 1950s, many just disappeared or the small fry merged locally and disappeared. Cars have become more reliable over the many decades -- the modern ICE lasts many more miles with less maintenance than the ICE of 30 and more years ago. If EVs fulfill their potential, new models will continue to decline in price and continue the trend to long term ownership - which may lead to fewer sales by fewer companies (after a period of transition where electric becomes the only sensible choice). Adoption curves tend to go slow, slow, slow, then overnight. Film camera, digital camera, mobile phone camera -- all over 25 years. Might be faster this time. Consider the auto equivalent ICE, hybrid, pure EV. We're already at stage 3. BYD's prediction is believable.
Needs to happen that many car companies can't make money so there needs to be a rationalization in the market where lesser players go the way of the dodo
https://preview.redd.it/yebhvm3lm0kg1.png?width=817&format=png&auto=webp&s=b5d4bad45657d94056d9960ebd806ae60c5f8c09
Xi invented tariffs!?
Tariffs are a tool. Don’t you that?
Jetour is under Chery, which is considered a giant in this industry
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