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Volkswagen faces increasing competition in the Chinese market, especially in the field of new energy vehicles. While Volkswagen remains the largest car brand in China, the rise of local automakers has forced Volkswagen to recalibrate its strategy to meet new market challenges.
Recently, Volkswagen Group CEO Oliver Bloom was interviewed by the German website "Frankfurter Allgemeine Zeitung". Commenting on the challenges Volkswagen's electric vehicles face in China, Bloom said that Volkswagen is currently unable to maintain its leading position, admitting that Volkswagen is "not ready" for electric vehicles and "cannot keep up" with the rapid growth and fierce competition in the Chinese market.
Bloom believes that in the current situation, Volkswagen should avoid setting overly idealistic targets for its share of the Chinese market. He pointed out that in a highly competitive environment, being able to have a market share of more than 10% is already a "very impressive" achievement. He revealed that Volkswagen's overall market share in China has dropped from 18% in 2018 to 14% in 2023, while domestic EV manufacturers in China are gaining momentum to gain market share.
Although Volkswagen still retains its position as China's largest car brand, the gap between the two sides has narrowed further under the fierce pursuit of local car company BYD. BYD's deliveries in 2023 reached 3.02 million units, a 61.9% surge from last year's figures.
In terms of pure electric vehicles, Volkswagen will deliver about 191,800 pure electric vehicles in China in 2023, a year-on-year increase of 23.2%. However, this achievement is still insignificant in the face of the overall growth of the Chinese market. BYD, on the other hand, has once again set a new record, becoming the first auto brand in the world to roll off the assembly line of its 7 million new energy vehicles this year, and has been the leader in China's new energy vehicle sales for 11 consecutive years.
According to data from the China Association of Automobile Manufacturers, in 2023, China's new energy vehicle production and sales will be 9.587 million and 9.495 million units, respectively, a year-on-year increase of 35.8% and 37.9%, respectively, and the market share will reach 31.6%. Ouyang Ming, academician of the Chinese Academy of Sciences and vice chairman of the China Electric Vehicle 100 Association, predicts that the market share of new energy vehicles is expected to increase by 5% to 10% this year, reaching 36%-41%, and is even expected to exceed 40%, close to 50% by 2025, and more than 50% by 2026, occupying a dominant position in the automobile market.
-- China's new energy vehicle market share ranks first in the world
In terms of market share, the global market share of new energy vehicles will reach 13.3% in 2022, of which China has the highest market share of new energy vehicles, reaching 24.4% in 2022, followed by Europe, with a market share of 17.3%.
-- Forecast of the market size of new energy vehicles
According to Statista's research and analysis, the compound annual growth rate from 2023 to 2027 will reach 14.18%. From 2024 to 2029, the size of China's new energy vehicle market is expected to grow from 1,313.97 billion yuan to 2,936.13 billion yuan, with a compound annual growth rate of 14.34%.
Chen Qingquan, an academician of the Chinese Academy of Engineering, pointed out that the first half of the automotive revolution is electrification, and its core technologies include lightweight body, high-performance powertrain integration and high-performance battery safety pack. In this regard, China has been the world's largest producer for eight consecutive years. However, he also pointed out that the mainland automotive revolution still faces challenges, and the development of the second half will mainly focus on intelligence, networking and sharing, and its core technologies are automotive chips and operating systems.
Wang Chuanfu, founder of BYD, said that the development path of the new energy vehicle industry is full of challenges, and the development of the industry has been mixed with joys and worries. Optimistically, the new energy vehicle market has huge potential, but worryingly, the market competition is becoming increasingly fierce, and the industry has entered a cruel knockout stage. After 20 years of cultivation and growth, China's new energy vehicles have entered a cyclical adjustment stage, and enterprises need to realize scale effects and brand advantages as soon as possible.
Prospective Economist APP Information Group
For more research and analysis of this industry, please refer to the "Analysis Report on Market Prospect and Investment Strategic Planning of China's New Energy Vehicle Industry" by Qianzhan Industry Research Institute
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