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- As the industry bets big on electric vehicles as the technological solution for the future, a wide door has opened for new manufacturers to join the game.
- Plus, the cost and quality of their vehicles are far superior to what I see in the West,” he added.
- Instead of increasing the production of this type of car, the American brand is choosing to reduce activity on its assembly lines while witnessing how the market is betting on an alternative technology – hybrid cars.
After multiple visits to China last year, Ford CEO Jim Farley returned with a stark warning about the technological capabilities of Chinese automakers in the electric vehicle space. His observations highlight a growing concern for traditional Western manufacturers as new players enter the global automotive market.
The rise of Chinese brands in the automotive world
The automotive sector has undergone major transformations in recent years. As the industry bets big on electric vehicles as the technological solution for the future, a wide door has opened for new manufacturers to join the game. Chinese brands are seizing this opportunity, reaching more Western markets with impressive speed.
Sales figures tell the story – manufacturers like MG (owned by SAIC), Chery (competing with its Omoda and Jaecoo brands), and BYD are new players betting everything on conquering markets beyond China. These brands were barely known in Western markets just a few years ago but are now making significant inroads.
China’s automotive invasion of Western markets
Across Europe and beyond, these Chinese manufacturers are growing at a rapid pace, while traditional brands see their sales decline as these companies gain ground. Tensions have risen lately, leading to reactions such as the tariffs the European Commission has imposed on electric cars manufactured in China.
Despite these barriers, sales of Chinese vehicles show no signs of slowing down. They threaten to gain even more market share thanks largely to a pricing strategy that eliminates any hint of competition they might find in Western markets. This obviously has a negative impact on traditional brands that find themselves unable to compete on equal terms.
But the competitive advantage of these Chinese brands isn’t just about price. These manufacturers arrive with products loaded with technology, very complete standard equipment, and adjusted selling prices that are often reinforced with aggressive discount campaigns and promotions.
Ford CEO alarmed by Chinese capabilities
Quality – a characteristic not historically associated with Chinese manufacturers – is another major bet these brands have made to improve and reach more customers. Jim Farley, CEO of Ford, witnessed this firsthand during his six or seven visits to China last year, aiming to understand from within how the Chinese automotive industry functions.
The executive returned deeply concerned after discovering how they work and, above all, how they adapt and evolve to improve day by day both the cars they manufacture and the services they offer to customers.
“We are in a global competition with China, and it’s not just about electric vehicles,” Farley said in a recent speech during the Aspen Ideas Festival held last Friday. “If we lose this, we won’t have a Ford in the future,” the CEO of the blue oval company warned.
Jim Farley’s visits to China have been eye-opening for the executive. “It’s the most humbling experience I’ve seen,” he explained. “Why be so surprised about a country that can’t sell cars in the United States? It all comes down to production.”
According to Ford’s top executive, China not only manufactures more electric vehicles than any other country, but their quality is not deficient either: “70% of all electric vehicles in the world are manufactured in China,” the executive stated.
“They have vastly superior vehicle technology. Huawei and Xiaomi are in all cars. You get in and don’t have to pair your phone. Automatically, your entire digital life is reflected in the car. Plus, the cost and quality of their vehicles are far superior to what I see in the West,” he added.
Hybrid cars remain the most demanded option
These statements come at a time when the new Xiaomi YU7, a luxury electric SUV that the Chinese company will sell for about $38,000, has just been unveiled and, as reported, already has some 200,000 orders despite not yet having started its commercial life.
For its part, Ford is adapting its strategy to produce fewer electric vehicles. Instead of increasing the production of this type of car, the American brand is choosing to reduce activity on its assembly lines while witnessing how the market is betting on an alternative technology – hybrid cars.
This is something other brands are already doing after previously announcing they would become electric vehicle manufacturers in the coming years. The market has responded by focusing sales on hybrid vehicles, and this movement is also affecting the mentioned Chinese brands, which are now also selling cars with this type of powertrain.
