Across The Border | Four brands to dominate in China’s automotive oligopoly
Great Wall Motor, Geely, SAIC Motor and Guangzhou Auto will dominate among China’s carmakers in years to come, analysts say.
The automotive industry in China, where more vehicles are sold every year than anywhere else on earth, is developing toward an oligopoly dominated by four manufacturers with their own brands, analysts said.
Chinese customers, buoyed financially by three decades of economic growth and spoiled by the flood of top marques into the market, are accustomed to expecting higher quality from their vehicles, which marks the end of the “low-price, high-volume” business model for carmakers, said Guotai Junan Securities’ analysts Wang Yanxue, Zhang Shuli and Xu Weidong.
“The market share of four domestic car makers will surge from the current 45 per cent to 60 per cent or above, with both prices and volume rising together,” they said.
The four companies are Great Wall Motor Co. based in Henan province, Volvo’s owner Geely Automobile Holdings, SAIC Motor Corp in Shanghai, and Honda’s Chinese partner Guangzhou Automobile Group, according to their forecast.
Nearly 28 million vehicles were sold in China last year, a 13.7 per cent growth from 2015 that marks the industry in its golden age. The average price of a vehicle has risen by a third over a decade to 127,600 yuan (US$18,486) in 2016.
