Why China Dominates the New Car Race

A little peek behind the
CarsGuide
curtain. At least once a week the whole team gets together to talk about cars. Well, it’s actually to shape the week’s news lists, but it’s also because, unsurprisingly, we all like to get together to talk about cars.
Anyway, a recent one of these catch-ups occurred not long after the Beijing show. Now full disclosure, I wasn’t at what might well be the most important show on the calendar these days (but I was in China at the same time, just somewhere else and with another brand, another sign of the significance of that market).
Those who were there tell me much the same thing — not only were they shocked by the number of brands, and the number of vehicles unveiled, they were equally surprised at how many of the legacy brands were displaying Chinese-built models.

The Rise of Chinese Partnerships in the Automotive Industry

There are now lots of legacy brands drawing down on Chinese partnerships to produce cars. For example:

Mazda with its 6e and CX-6e (produced with Changan Automobiles)
Nissan with a whole bunch of stuff, including the Frontier Pro (produced with Dongfeng)
Honda, which has pushed back its in-house EV ambitions to draw on Chinese-developed models instead
Toyota with the bZ7 (developed with GAC)
Volkswagen with the 9X (produced with SAIC)

These partnerships are becoming increasingly common as legacy brands seek to leverage China’s high-speed, low-cost manufacturing expertise. However, this trend raises some important questions about what truly makes a manufacturer’s car “their” car. Is it the badge? The design? The technology? The dynamics? All of the above?

The Identity Crisis of Legacy Brands

The bigger question is, can legacy brands really hang on to all of the things that make them special if they’re not just built in China, but built in partnership with Chinese brands?

Some of these cars are destined for Australia, some aren’t. But it does beg the question – what truly makes a manufacturer’s car their car. Is it the badge? The design? The technology? The dynamics? All of the above?

Just last week I wrote that legacy brands partnering with China could be a long-term masterstroke, pairing decades of engineering know-how with China’s high-speed, low-cost manufacturing expertise could give traditional marques a real boost. But then two things happened this week that made me ask another question.

Insights from Industry Experts

The first was a chat with Volkswagen Australia, and specifically its very knowledgeable Head of Passenger Cars, who told me that the driving dynamics and engineering of its vehicles are what sets them apart from the often-cheaper Chinese competition. And the second was that CarsGuide car chat.

And both got me wondering about the impossible choices being faced by some legacy brands in this more-hostile-than-ever environment. Do nothing and face possible oblivion, or dial up their Chinese partnerships for global markets and risk losing their identity.