Electric cars advance in China – 05/12/2023 – Market

Chongqing Changan Automobile plans to accelerate the electrification of products at two of its joint ventures with foreign automakers, as Chinese domestic EV brands increasingly gain market share at the expense of fossil fuel carmakers, according to the chairman of the board of the state-owned giant.

The turnaround in the industry was revealed at last month’s Shanghai Auto Show, where Chinese brands’ booths were packed with visitors, Changan’s Zhu Huarong said in response to questions from journalists during the company’s 2022 earnings presentation, on Monday (8). A decade ago, cars made by China’s numerous international joint ventures would normally have been the center of attention at such an event, he said.

Changan is feeling the effect of changing trends firsthand. Its partnership with Ford Motor saw a 17.6% decline in annual auto sales in 2022, while sales of its joint venture with Mazda Motor fell by 21.4%, according to a statement from Changan in January. . Most of the vehicles sold by the two joint ventures are gasoline-powered cars.

“We must admit that there are some challenges for joint ventures today,” Zhu said in the earnings announcement.

In the face of slumping sales, Changan’s joint ventures with Ford and Mazda plan to accelerate its transition to electric vehicles, Zhu said, in an effort to survive in China’s crowded auto market, where about 150 brands compete. Changan also plans to team up with Ford to launch new electric vehicle models next year, Zhu said. The company has similar plans with Mazda, he added. The company aims for new energy vehicles (NEV) to represent 60% of its total sales by 2030.

Shenzhen-based BYD, which makes pure electric vehicles and plug-in hybrids, led China’s passenger NEV market last year with an impressive 31.7% share, which contributed to the combined top Chinese brands collectively control more than 60% of the local NEV market, according to data from the China Passenger Car Association (CPCA).

In 2022, Changan’s private label NEV sales more than doubled to more than 271,000 units, representing around 12% of the group’s total sales, which grew by just 2%, according to the January announcement.

Changan has two proprietary brands for passenger electric vehicles – Avatr and Deepal – and has announced plans to unveil a third, called Changan Qiyuan, later this year, which will focus on fuel-efficient cars. Avatr’s only model, the sport utility vehicle (SUV) Avatr 11, is equipped with intelligent driving software and a digital cockpit system powered by the Harmony OS operating system, developed by Huawei Technologies.

The company is also looking at growth opportunities in foreign markets in addition to China. Changan is ready to invest four billion yuan ($580 million) in a factory in Thailand, projected to reach a future capacity of 200,000 NEVs per year, Zhu said, adding that the company aims to enter the European market in 2024.

At the same press conference, Changan chairman Wang Jun highlighted the industry-wide price war in the first quarter, which he said could intensify competition between electric and fossil fuel car makers. He predicted that more than 40% of new cars sold in China this year would be NEVs.

In January, Tesla increased discounts for some of its models sold in China, triggering a wave of price cuts that has involved several well-known electric vehicle makers, such as XPeng and BYD, as well as joint ventures that make conventional vehicles, like Dongfeng Peugeot Citroen Automobile.

The price cuts of joint ventures that make cars powered by fossil fuels show their desire to liquidate inventories as they lose share of China’s domestic auto market to Tesla and local electric vehicle brands, an Everbright analyst said. Securities in a March research report.

“The price war could drive weaker automakers, especially joint ventures,” analysts at Ping An Securities said in a March report, citing exits by foreign brands including Suzuki Motor and Acura from the mainland China market. in the last years.

Translated by Paulo Migliacci