According to the China Association of Automobile Manufacturers on April 21, China produced 34.53 million vehicles last year, up 10.4% from a year earlier. Over the same period, sales of new-energy vehicles — including EVs and hybrids — totaled 16.49 million, meaning one out of every two new cars sold was an electrified model.
Chinese policymakers and industry moved quickly toward electrification, judging it would be difficult to catch up with the U.S., Europe and Japan in internal-combustion technology. Backed by strong government support, domestic automakers have sharply increased market share.
BYD has begun applying its autonomous-driving system, branded “God’s Eye,” across its lineup this year. BYD Chairman Wang Chuanfu pledged that “all customers” would be able to use smart driving. Huawei, Xpeng and others are also using deep-learning, end-to-end systems to absorb real-world urban driving data. Features such as driving in autonomous mode on certain routes and the car finding a parking space and stopping on its own have become commonplace.
Domestic brands’ share of China’s auto market rose to 69.5% last year, up 4.3 percentage points from the previous year. BYD (14.7%) and Geely (11%) further solidified their top-two positions, while Volkswagen Group (10.9%) slipped to third. Tesla’s Shanghai plant shipments fell 7% from a year earlier to 851,732 vehicles.
China’s advantage is often described as economies of scale. Automakers expanded production on the back of domestic demand, strengthening price competitiveness. A Bank of Korea report published this month, titled “Review of the Key Drivers of Growth in China’s Auto Industry,” said China supplemented core technologies such as engines and transmissions through cooperation with Western manufacturers.
Instead, it focused investment on areas where it holds an edge, including batteries, electric motors and rare earths. The report said this helped lower production costs and build a structure able to respond flexibly to policy shifts.
Hyundai’s latest bid comes amid that shift. This month, at Hyundai Motorstudio Beijing, the company formally announced the Ioniq brand’s entry into China and unveiled two concept cars. In a market far different from the earlier, combustion-engine era, Hyundai must find a way to compete with domestic giants while also facing established global brands.
* This article has been translated by AI.
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