Western and Chinese carmakers in China: a new paradigm I. The inevitable decline of non-Chinese carmakers in China
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Western and Chinese carmakers in China: a new paradigm I. The inevitable decline of non-Chinese carmakers in China
- Among the ten largest non-Chinese carmakers established in China, only two have managed to make progress on the Chinese market over the past five years: Toyota and Tesla.
- The other eight (Volkswagen, GM, Honda, Nissan, Hyundai-Kia, Ford, Mazda and Stellantis) are inexorably declining, due to strong competition from Chinese carmakers, and from Toyota and Tesla. Some like Mazda or Stellantis are disappearing from the Chinese market, after Suzuki and Mitsubishi which have already disappeared. Volkswagen lost 1 million sales between 2017 and 2023, GM lost 2 million. Honda, Nissan, Hyundai-Kia, Ford have lost several hundred thousand.
- This trend seems inevitable in the future, because the models of Chinese carmakers are becoming more and more competitive, which has allowed them to increase from 40% market share in China in 2015 to 45% in 2021 and 57% in 2023. Their rise is meteoric. The extent of their range which is constantly developing, their technological advance in terms of electric motorization, their design which has made enormous progress and is today more modern than the non-Chinese cars stuck in their tradition, all together in a market with a fierce competition on prices. All these factors have enabled a vast transfer of Chinese customers towards Chinese models.
- It will be very difficult for non-Chinese carmakers to regain lost market shares. Toyota and Tesla remain exceptions. Certainly, Tesla's position does not seem to be compromised in the short term, but for Toyota, it will be more delicate because this carmaker does not propose mass volume electric models sold at a large scale and already the decline seems to have started in 2023.
Renault add the Trafic to its range of battery electric LUVs
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Renault add the Trafic to its range of battery electric LUVs
- Renault presented the battery electric version of its Trafic, a light utility vehicle (LUV) in the N1-2 segment, which is added to the BEV LUV Renault range made up until now of the Kangoo ZE (N1-1) and Master ZE ( N1-3).
- The range of Renault light utility BEV is now complete and can compete the light utility BEV range of Peugeot, Citroën, Opel and Fiat from the Stellantis group:
1. The Kangoo ZE competes with the Peugeot e-Partner, Citroën e-Berlingo, Opel e-Combo and Fiat e-Doblo.
2. The Trafic ZE competes with the Peugeot e-Expert, Citroën e-Jumpy, Opel e-Vivaro and Fiat e-Scudo.
3. The Master ZE competes with the Peugeot e-Boxer, Citroën e-Jumper, Opel e-Movano and Fiat e-Ducato.
- Models based on the Renault Trafic such as the Nissan Primastar or the Mitsubishi Express should soon receive the same electric motorization as the Renault Trafic, just as the Renault Kangoo clones (Mercedes Citan / T Class and Nissan Townstar) have received the same electric engine.
- Inovev foreacasts that 10% of Renault Master produced in 2030 will be battery electric (compared to 2% in 2023), 20% of Renault Trafic in 2030 (0% in 2023) and between 30 to 35% of Renault Kangoo in 2030 (compared to 15% in 2023).
- In 2023, Renault branded battery electric LUVs will represent around 10,000 units. Inovev forecasts a total volume of more than 60,000 units in 2030.
Could Kei Cars be sold in Europe?
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Could Kei Cars be sold in Europe?
- Japanese law designed as early as the early 1950s specific regulations for small cars called "keijidosha" or Kei Cars that allowed local people to abandon their two-wheelers and switch to four-wheeled vehicles and small cars. budget, with the goal of low-cost mass motorization that allowed the start of a large-scale automobile industry. From 1949 to 1955, the maximum size and authorized engine capacity evolved regularly to stabilize at a length not exceeding 3 meters and a width less than 1.30 meters. From 1976 to 1990, the maximum length was increased to 3.20 m then 3.30 m in 1990 and finally 3.40 m since 1998 (over 1.48 m wide). The authorized cylinder capacity has evolved from 150 cm3 in 1949 to 360 cm3 in 1976 then 550 cm3 in 1990 and finally 660 cm3 since 1998. These small-sized vehicles benefit in Japan from a tax of 3% instead of 5% on other cars. They also benefit from other advantages, such as free places in town or cheaper insurance.
- Kei Cars traditionally represent a third of the Japanese market.
- Introducing such regulations in Europe would make it possible to create a new market in place of the A segment, which is shrinking on this continent, to fight CO2 emissions more effectively and to replace heavy and imposing vehicles in town that are not at all adapted to their environment. The question is whether electric motorization should not be added to these cars. However, we should expect an outcry from car manufacturers who are increasingly reluctant to produce low-margin cars, which are Kei Cars.
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New Renault 5 E-Tech: 400,000 vehicles/year or 100,000 vehicles/year in Europe?
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New Renault 5 E-Tech: 400,000 vehicles/year or 100,000 vehicles/year in Europe?
- Renault presented the new R5 E-Tech (BEV sedan of the B segment) at the 2024 Geneva Motor Show. The essential question that arises is:
§ Will this new R5 be able to position itself as a mass vehicle, as the old R5s were: rates of 400,000 units per year reached for the R5 (1972-1984), then the Super 5 (1984-1996), and the Clio (rate of 400,000 units per year during its best years)?
§ Or will its volumes be around 100,000 vehicles per year, like those planned for the Zoé when it was launched (in fact this model sold 40,000 units per year on average)?
- At first glance, due to its engine and its price, the new R5 E-Tech does not directly replace the Renault Clio, a B segment sedan with a thermal or full-hybrid engine (HEV). Rather, it replaces the Renault Zoé, a BEV sedan from the B-segment with production stopping at the end of March 2024, but with greater ambitions thanks to a design inspired by the old Renault 5 launched in 1972. In fact, the replacement of the Renault Clio will be launched in 2026. It will receive thermal and full-hybrid (HEV) engines like today.
- Given that the Renault 5 E-Tech will be significantly more expensive than the Clio, it doesn’t target the same market. Inovev is therefore forecasting 100,000 sales in 2030 of this new model BEV, which marks a clear progress compared to the Zoé. It could reach 200,000 sales per year between 2030 and 2035. If it reached 400,000 vehicles per year, the volume recorded by the R5 and Clio during their best years, this should not be before 2035. It should be noted that the Inovev's forecasts for zero-emission vehicles in 2035 do not reach 100% of the market, as required by the EU regulation (Inovev analysis to come).
- Compared to the original Renault 5, the Renault 5 E-Tech is 42 cm longer (3.92 m instead of 3.50 m) and is much heavier (1,350 kg to 1,450 kg depending on the version, compared to 800 kg to 850 kg for the old R5). Based on the AmpR Small platform (ex-CMF-B EV), it will be produced at the Douai plant, alongside the Mégane E-Tech and Scénic E-Tech. Its electric motor delivers 95 hp (70 kW) with a 40 kWh battery, 120 hp (90 kW) with a 40 kWh battery and 150 hp (110 kW) with a 52 kWh battery. The 40 kWh battery allows a range of 300 km and the 52 kWh battery allows a range of 400 km.
China became the world's leading exporter of vehicles in 2023
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China became the world's leading exporter of vehicles in 2023
- In 2023, the Chinese automobile industry exported 4.91 million light vehicles (+58% compared to 2022) and thus became for the first time the world's leading exporter ahead of the European Union (4.75 million) and the Japan (4.42 million). This volume represents 16% of all vehicles produced in China last year.
- Chinese carmakers are gaining market shares on all continents, particularly in Southeast Asia, the Middle East, South America and the European continent which imported 870,392 vehicles including 353,276 units in Europe 29 countries ( EU + UK + Switzerland + Norway) and 454,786 units in Russia. This continent absorbs nearly 20% of Chinese exports. Russia has become China's largest export market, ahead of Europe (29 countries), Mexico, Australia, Saudi Arabia and Thailand.
- Note that the few factories located in Russia which assemble Chinese automobiles operate according to the CKD (Complete Knock Down) process, which implies that these assemblies are counted by China as exports.
- It is interesting to note that Chinese exports are not only made by Chinese carmakers as non-Chinese cars are also exported from China, notably Tesla but not only.
- Another interesting clarification, one in three vehicles exported from China in 2023 was battery electric (i.e. more than 1.6 million units), which in opposition to Japanese carmakers, who are well behind in electric motorization. However, Japan produces many of its vehicles abroad, which is not the case for China. China could thus be pushed to produce massively in their foreign markets, as Japan did from the 1980s.
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