#216

A Global China

CASE

The Road to Chinese OEMs Expanding Their Sales Overseas

TABLE OF CONTENTS
Introduction

Enabling
CASE

China’s automotive industry is expanding at an increasingly rapid pace. Domestic OEMs who have built a strong
foothold in major markets such as Europe and the U.S are looking to break ground in new markets like Indiaand Africa. At the same time, newer players are hoping to establish, or expand, their presence in the West.

Executive Summary
The Basics
Motivations and Capabilities

Regardless of their experience and understanding of the local, or international, automotive landscape,
expanding to new markets for both types of OEMs can be equal parts promising and challenging. Thestrategies and products that could have proven beneficial for domestic OEMs in China may not work well in a
broader market like the U.S. Likewise, the tactics that have previously proven successful for larger Chinese
OEMs in the U.S. may not translate as well to other regions.

Global Product Outlook
Identifying competition Hotspots
Analysing Competition Hotspots

A Global China takes a deep dive into both of these movements, identifying the challenges and opportunitiesfaced by Chinese OEMs wishing to expand. Throughout, it provides key insights into how these OEMs are
adapting to new markets while profiling the automakers who expanded successfully. The report works similarly
to understand the best business practices for western markets as well as the regulatory, commercial, andtechnological challenges Chinese OEMs face abroad.

OEM Profiles
Future Outlook & Recommendations

Next Steps

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#216/A Global China

Key questions answered> What are the different
strategies that Chinese
OEMs are using to expand
their footprint outside ofChina?
> How are Chinese OEMs
adapting their offeringsand branding in order tosuccessfully appeal to newconsumers?

> What are the main barriers
to expansion outside China
and can Chinese OEMs
overcome them?

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January 2023

A Global China

216-23

The road to Chinese OEMs expanding their sales overseas

Contents
216 A global China
Introduction ≫Global product outlook≫

Executive Summary ≫▪ Europe▪ North America▪ Rest of the world

Identifying competition hotspots≫
The Basics ≫▪
▪
▪
▪
▪
▪

Chinese OEMs
Export volume
Export segment
Export regions
Export priceLessons Learnt from Japan & Korea

Motivations and capabilities ≫▪
▪
▪
▪
▪
▪
▪
▪
▪

Growth opportunities
Upgrade brand image
Enhance products and services
Industry policy
Leverage EV expertise
Develop overseas manufacturing solutions
Set up local network
Establish R&D
Improve Brand awareness▪ Hotspots selection▪ CASES rating

Analyzing Competition hotspots≫
▪
▪
▪
▪
▪

European EV SUVEuropean B-segment EVs
European D-segment EVs
Developing countries small ICE SUVs
US EV SUV

Future outlook & Recommendations ≫▪ Key success factors & challenges▪ Future roadmap outlook▪ Regional outlookNext steps ≫▪ Expert Insight▪ How We Help – Consulting Support▪ How We Help – Off-the-shelf Research Reports

Contact SBD ≫OEM profiles≫▪
▪
▪
▪
▪
▪
▪
▪
▪
▪

BYD
ChanganCheryDongfeng
Geely
GWM
JACNioSAIC
Xpeng

Total number of pages - 178

Example slides
from the report

Executive Summary

Chinese OEMs are strongly motivated to sell outside China
Here is a roundup of the key motivations that are pushing Chinese OEMs to explore new alternatives and look for new opportunities in challenging markets likeEurope or the US while they have already succeeded in less competitive, developing markets. The fast growth of the new energy vehicles industry in China hasradically changed the face of the domestic Chinese sector, and now these companies with new and strong expertise are looking to expand in more quickly changing
markets.

New Business Opportunities

Brand Image

Product/Service Improvement

Preferential Industry Policy

Leverage EV Expertise
Advantage

The new energy vehicles
represent a big opportunity
for Chinese OEMs that after aslowdown of the domestic
market growth, a period ofcrisis, are looking for newopportunities to keep themomentum going.

Proving themselves in achallenging market like
Europe can establish a brandname on the global stage,
which also gives value indomestic markets.

Different expectations in amore developed market arealso the key to unlocking
innovations and improving
both products and services.

The right regulatoryenvironment is crucial in the
choice of a new market.

In the domestic market,
Chinese OEMs have alreadymanaged to capture thelargest share of the market
where before foreigncompanies dominated.

The generally higher pricing
of cars in Europe is anotherattractive factor thatconsidered the lowerproduction costs in Chinamight give OEMs opportunity
to realize higher margins.

6Also, the strict requirements
force each company to push
the boundaries in terms ofquality and safety.

Like companies did whenentering the Chinese market,
this is an opportunity for
Chinese OEMs to also develop
products to cater to adifferent audience.

This is key to removing thebad reputation for cheap lowquality products like has
happened earlier in theconsumer electronics
industry.

This is important not only forthe product but also for new
business models that might
not have been adopted yet in
the home country.

Chinese OEMs havestrategically targetedcountries where the sales of
EVs was particularlyincentivized.
Some examples are theASEAN Regional
Comprehensive Economic
Partnership which includes
tax reduction for vehicles
imported and exported.

In Northern European
countries such as Norway,
Sweden, and Germany thenumerous incentives for EVs
represent an importantresource.

This has given them theconfidence to approach once
again developed, highly
competitive markets likeEurope.
Along with the strong
expertise in EV development,
China also has a fully
developed supply chain,especially for key components
like the batteries, for which
they control the majority ofthe global resources.

6Global Product Outlook

North America

North America - Detail
The table below lists all Chinese OEMs’ presence, models’ segments, sizes, powertrains, current status, and future expansion plans (2023-2025) in the region.
Current
OEM Group

Brand

1Expansion

Powertrain

Size and Body
TypeCountries Entered

Powertrain

Size and Body
Type

N of Countries
for Planned
Expansion

EVC, D, SUV

1OEM
Included in theProfile Section

BAIC

Beijing

ICE

B, C, SUV, Pickup

1

BYD

BYDICE

C, MPV

1Changan

Changan

ICE

B, E, SUV

1

✓

Geely

Polestar

PHEV, EV

D, SUV

2-9

✓

JAC

JAC

ICE

A, B, C, D, SUV,Pickup, MPV

1✓SAICMG

PHEV, ICE

C, D, SUV

1✓✓77

Europe - B-Segment EVs

Analyzing Hotspots

Europe B-Segment Volume EVs
The table below highlights what CASES+ leading, and competitive offerings look like in this specific region and segment by bringing examples from other B-segment EVs in Europe

CAS

ES+Examples ofLeadership••Pillar-to-pillar displaysystem for infotainment
and instrument clusterwith dual 12.3’’ and8.8’’
Wireless Android Autoand Carplay, voiceassistant and built-in
navigation, andsoftware OTA update••••

Adaptive Cruise Control
Enhanced Automatic•
Emergency Braking
Hands-free driving
Lane-Centering
detecting curves withreal-time cameras,
sensors, and GPS•
Open R link profiles
with Android
Automotive to manage
navigation, radio
temperature, apps, and •apps driving, ambient
lighting, and comfort

EV-specific services
charging station
information andtransaction, other invehicle payments
Remote charging
control•

ECU: Secure storage,secure boot, secure
execution, secure OTA•

Electrical architecture:
Secure gateway

Autonomous
emergency braking
Lane keeping assist

Up to 3 profiles
managing navigation
history, contacts, andaudio settings

Charging station
information•

External Interface:
Mutual authentication,
encrypted
communication, secure
firewall•

3D instrument cluster

Examples ofCompetitive
offering••

Built-in connected•features, andsmartphone duplication •Map and software OTA
updates••

88Analyzing Hotspots

Europe - Small ICE SUVs

Developing Countries’ Small ICE SUVs Positioning Chessboard
Chessboard OverviewThe table on the right displays the positioning of Chinese OEMs compared tothe best and competitive offerings from local and other foreign OEMs within
the segment.
Positioning is based on CASES+ overall rating shown at the beginning of thesection against pricing divided in brackets as Very Low, Low, Medium, High,and Very High.

•Haval sub-brand of GWM focused on SUVs and Pickup Trucks is one of themost well-known in developing countries, and on average with small SUV
models such as Jolion/H2 Haval matches the competitive offering of otherOEMs in terms of CASES+ but a slightly lower price.

•A threat to the incumbents is represented by SAIC’s GM which scores
similarly in CASES+ but offers its smaller SUVs ZS, and ZX at asignificantly lower starting price.

•Other brands such as Geely, Changan, JAC, and Dongfeng’s DFSK offer
compelling and affordable alternatives but with fewer autonomy featuresand more basic connected features, sometimes lacking services that most
expect on modern vehicle’s infotainment such as Android Auto and Apple
CarPlay.

•Important to note is also that some of these brands (i.e. MG) are alsostarting to deliver EV models in these regions, even if for now they remaina very small percentage.

CASES+ Rating

InsightsLeading
CompetitiveVery Low

LowMediumHigh

Very HighPricing brackets
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