The_Accessor_Autumn 2025 web - Flipbook - Page 26
JOURNAL
ENGINEERING
Renault Twingo E-Tech
revealed in production
in November 2025:
Based on the R4 and
R5 BEV platform, with
reduced parts count
and a circa €20,000
retail price. Will this be
enough to answer the
China challenge?
PROFITABILITY,
PRODUCT COMPLEXITY
AND REDUCED MARGINSK
We’re going to look into how events are shaping the automotive business, writes
Andrew Marsh, FIMI, Hon member of IAEA.
et’s consider the chaos
in Europe caused in no
small part by mandated
battery electric vehicles
(‘BEV’) along with the
politically driven agenda to purge the
internal combustion engine… at the
very same time the ‘overnight success’
of China which has taken 40 years,
昀椀nally arrived in Europe.
L
FIRSTLY CHINA
For many years China set the objective
of building a domestic automotive
sector capable of not only serving the
domestic market but also for export.
All sorts of routes were tried, leading
to many mistakes along the way.
Incentives were offered by provinces
and domestic banks to ‘invest’ in the
automotive sector. The result was
extensive factory buildings operating
far below capacity with products that
were until around 2010 not quite world
class.
models to be built for China and to
be exported too. Famous ‘foreign’
manufacturing partnerships included
GM, Ford, Mazda, Honda, Toyota,
Mercedes-Benz, Volkswagen Group
and BMW.
Since that time the wider China
economy has been transformed with
signi昀椀cant increase of wealth for
many. For the automotive sector this
meant domestic demand increased
signi昀椀cantly, along with integration of
domestically designed / developed
electronic systems into vehicles. This
enabled fresh models with world class
build quality.
BIGGER IS BETTER
In 2024 the China automotive sector
had:
• Production: 26.76 million cars,
3.1 million LCVs and 0.99 million
HGVs per year.
• Factory space / capacity close to
55 million units per year.
China has few signi昀椀cant manufacturing
facilities outside the country – so out of
75.5 million units built globally in 2024,
around one third came from China.
Will 55 million vehicles come from
China eventually? No. Long ago most
manufacturers understood it was way
more cost effective to ship high value
parts around the world rather than
complete vehicles which contain
a signi昀椀cant volume of air.
Investment in new products took off
from around 2010, feeding an
ever-expanding market. The point
where domestic brands were no
longer seen as a low-cost alternative
to imports or foreign company joint
ventures built in China occurred around
2018.
China market-peak pro昀椀tability arrived
around 2023, but there has been a
massive internal market price war since
then which has affected domestic, joint
venture as well as foreign imported
vehicles, with some international
players such as Jeep electing to leave
the market altogether.
One part of the plan that did work
was to partner with non-China
manufacturers, allowing up to date
These numbers seem not to include
e-scooters.
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THE ASSESSORS JOURNAL | AUTUMN 2025 | www.iaea-online.org/news/the-assessor
