How Automakers Are Fighting to Regain Market Share in China (AI Translation)

【周刊提前读】跨国车企如何抢回在华份额？本地化研发是关键

Multinational automakers are actively working to reclaim their competitive footing in the Chinese automotive market. Brands such as General Motors (via SAIC-GM) and Nissan have recently achieved notable successes, with the new Buick GL8 and Nissan’s electric N7 model both receiving over 10,000 orders shortly after their launches. Toyota led this new wave by introducing the all-electric Bozhi 3X, which, like its competitors, was heavily localized—developed mainly by Chinese engineers and equipped with components from domestic suppliers. This trend toward localization is a collective strategy as multinational brands adjust their approaches to a rapidly electrifying Chinese market, where domestic brands dominate NEV sales. In fact, among China’s top 20 best-selling NEV models, 18 are homegrown brands, with NEVs forecast to make up 48.9% of new passenger car sales in 2024. Multinational attempts to import global EV models have largely failed to resonate, as illustrated by Volkswagen’s limited sales of just 200,000 NEVs in 2024—less than one-tenth its gasoline vehicle sales—despite significant investments, and Toyota’s experience with a tepid market response to its bZ 4X model. As a result, these companies are pivoting to embrace local R&D and supplier partnerships to refocus their strategies [para. 1][para. 2][para. 3][para. 4][para. 5][para. 6][para. 7][para. 8].

Industry insiders, such as Poizhi 3X’s Chief Engineer Li Wenbin, agree that multinational automakers must rapidly advance their local R&D capabilities—now considered vital to surviving China’s technological transformation into a hub for smart electric vehicles. This sentiment was echoed by experts at the Shanghai Auto Show, who warned that resistance to localized innovation risks marginalization. Notably, Chinese brands themselves also face significant survival pressures amid the ferocious pace of industry change, with no firm able to rest easy [para. 9][para. 10][para. 11][para. 12].

Toyota, traditionally seen as conservative, has shifted decisively since 2025. In a first, Toyota’s China subsidiary promoted Chinese executives to its top roles, signaling a commitment to local decision-making. A new “China Chief Engineer System” places Chinese talent in leading positions for both global and China-specific EV models. The newest models, such as the Bozhi 3X, feature technologies and designs tailored for Chinese tastes, like minimalist exteriors and advanced voice-interactive cockpits. Toyota is also leveraging China’s R&D ecosystem to influence headquarters-level EV strategy, establishing a new, wholly-owned Lexus EV plant in Shanghai with a capital investment equivalent to ¥107.1 billion. Other global players are partnering with Chinese firms for technology: Volkswagen’s $700 million investment in Xpeng, joint ventures with Horizon Robotics, and collaborations with Huawei and Momenta are representative of the broader shift. Multinational automakers, including Mazda and Audi, are increasingly developing EVs on Chinese technology platforms as they race to catch up [para. 13][para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27].

China remains integral to the global auto industry, projected to account for 30% of new car registrations worldwide and nearly two-thirds of all NEV sales in 2024. Global players that have failed to adapt, such as Stellantis, Suzuki, and Renault, have lost significant market share or exited China, with Stellantis now facing major sales declines and relying mainly on European and U.S. operations. BYD and Geely are fast-climbing global sales charts, and Chinese auto exports are rising, increasing the pressure on multinational firms to compete both at home and abroad. Meanwhile, a wave of global protectionism, most sharply felt under the U.S.’s new tariffs, has elevated the importance of localization in China for global automakers [para. 28][para. 29][para. 30][para. 31][para. 32][para. 33][para. 34][para. 35][para. 36][para. 37][para. 38][para. 39][para. 40][para. 41][para. 42].

Competition remains intense and the market landscape is far from settled. Although Chinese brands collectively hold a dominant 65.2% share of the domestic passenger car market as of 2024 (up from 38.4% in 2020), the field remains open. Multinational automakers see opportunity as NEV technology becomes more homogenous, allowing them to catch up via brand strength and safety expertise—an area brought into sharp focus by recent policy and high-profile incidents. However, both foreign and domestic companies face mounting cost and profit pressures, with slim profit margins and industry consolidation accelerating. Despite the headwinds, experts believe that if multinational automakers continue to rapidly localize and innovate, they have a realistic chance to regain competitive momentum in China’s pivotal automotive market [para. 43][para. 44][para. 45][para. 46][para. 47][para. 48][para. 49][para. 50][para. 51][para. 52][para. 53][para. 54][para. 55][para. 56][para. 57][para. 58][para. 59][para. 60][para. 61][para. 62][para. 63][para. 64][para. 65][para. 66].