Foreign carmakers are likely to see their market share in China shrink further this year as the brutal price war is expected to get worse, according to analysts.
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Overseas companies’ share of the mainland’s electric vehicle (EV) market could drop to 32 to 33 per cent this year from about 35 per cent last year, Valentin Mory, an analyst at French investment bank Natixis, said during a webinar on Wednesday.
“The price war is only getting fiercer and is unlikely to falter in 2025,” said Mory. “What we’ve seen in 2024 is only the beginning of something that is expected to be much bigger going forward – survival of the fittest.”
With demand for big-ticket purchases faltering because of China’s slowing economic growth, buyers are opting for cheaper and better EVs from domestic brands, said Gary Ng, a senior economist at Natixis.
The market share of domestic companies is expected to rise to 70 per cent this year from 65 per cent last year, he added.
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Amid slowing sales, carmakers on the mainland resorted to aggressive discounts at the end of last year, continuing a two-year battle. The price war was triggered by BYD, the world’s largest EV assembler, after it cut the price of its Sealion 05 hybrid SUV by 11.5 per cent. Tesla and others soon followed suit.