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Western brands may not have a future in China as local carmakers close in on the last remaining stronghold held by the likes of Volkswagen and Toyota, Stellantis has warned.
Maxime Picat, Stellantis’s chief operating officer for Asia-Pacific, Middle East & Africa, and one of the two internal candidates to become the next group chief executive, expressed skepticism about the ability of western auto groups to compete with local brands in China. He highlighted the significant market share local brands have taken from foreign carmakers across electric car and larger vehicle segments. Although brands such as Toyota and Volkswagen still sell large volumes of mid-sized petrol vehicles, known as the “C-segment,” Picat emphasized the expanding offensive of local brands in all vehicle segments, leaving western carmakers with a shrinking territory.
The trend of falling market share for western carmakers in China has been strong in recent years, making it challenging for them to maintain their positions in the market. While some western companies have pulled back from China due to intense competition and price wars, German manufacturers like Volkswagen have continued to invest heavily in the market. Volkswagen, Toyota, and other foreign brands have adopted the “in China for China” strategy to appeal to consumers who are increasingly opting for more affordable and technologically advanced electric vehicles from local brands. Despite the challenges, Volkswagen and Toyota remain the top two manufacturers of petrol vehicles in China, holding a combined market share of 34 percent.
In response to the changing landscape, Stellantis has taken a stake in Leapmotor, a Chinese startup, and is assisting in its growth in China and Europe. Meanwhile, Volkswagen has been vocal in criticizing the EU’s anti-subsidy tariffs on Chinese EV imports, a stance that sets it apart from other German carmakers like Stellantis and Renault. This issue has become a point of contention, especially as BYD has overtaken Volkswagen as the best-selling brand in China, according to Shanghai consultancy Automobility.
As Stellantis looks to replace former CEO Carlos Tavares, Maxime Picat has emerged as a potential candidate alongside Antonio Filosa. The board has initiated a comprehensive process to find a suitable replacement, ensuring that a good decision will be made regardless of the outcome.
In conclusion, the dynamics of the automotive market in China are shifting, with local brands gaining ground and posing a significant challenge to western carmakers. It remains to be seen how companies like Stellantis, Volkswagen, and Toyota will navigate this evolving landscape and maintain their positions in the world’s largest auto market.
