By The Rio Times | Created at 2025-04-02 10:09:14 | Updated at 2025-04-03 10:07:52
1 day ago
China pushes for consolidation among its state-owned automakers to strengthen their position in the global electric vehicle (EV) market.
Gou Ping, vice-chairman of the State-owned Assets Supervision and Administration Commission (SASAC), announced the plan during an EV forum in Beijing.
SASAC oversees nearly 100 central enterprises, including major automakers such as Chongqing Changan Automobile, Dongfeng Motor Corp., and China FAW Group.
The restructuring aims to pool resources for research, development, and manufacturing to enhance global competitiveness. Chinese automakers face mounting challenges abroad as foreign markets grow cautious of low-cost Chinese EVs.
To compete effectively, the government encourages companies to focus on improving vehicle quality and innovation. Changan and Dongfeng revealed earlier this year that their parent companies are planning a restructuring with another state-owned enterprise.
China Reorganizes State-Owned Automakers to Lead Global Electric Vehicle Market. (Photo Internet reproduction)Speculation suggests that FAW might join the merger. The three companies have collaborated since 2017 on EV development and have strengthened ties through executive exchanges.
If the merger proceeds, it could create a powerhouse with annual sales exceeding 5 million vehicles, surpassing BYD Co., which sold 4.27 million vehicles globally in 2024.
China’s EV Industry Consolidation
China has built a robust EV ecosystem with a vertically integrated value chain that includes raw material extraction and vehicle assembly. The country refines over 60% of the world’s lithium supply, enabling significant cost reductions.
Domestically sold EVs are often two to three times cheaper than those exported, giving Chinese automakers a competitive edge. However, international markets have imposed stricter regulations and tariffs on Chinese imports to protect local industries.
To counter these barriers, some Chinese companies explore joint ventures or localized production overseas. For instance, Stellantis recently partnered with Leapmotor to assemble EVs in Poland.
Domestically, intense competition has triggered price wars among manufacturers, pressuring profit margins. Companies like SAIC have sought strategic partnerships, such as its collaboration with Huawei, to regain market share and enhance technology.
China’s consolidation efforts reflect its determination to dominate the EV sector through innovation and efficiency. By creating larger entities with streamlined operations, Chinese automakers aim to reshape the global automotive landscape and challenge traditional players worldwide.
