The BYD e6 drives cautiously on the expressway soaked by the torrential rains which fall on the port city of Shenzhen at the end of spring. On the road, the diversity of models and brands of cars caught in traffic jams is striking. Here, there is no Renault Clio or Peugeot 208. In China, it is the local manufacturers who are leading the way, particularly in the electric mobility segment. Maple, Aeolus, Roewe, Aito, Forthing, Haval, HiPhi, Wey, Arcfox, Skyworth… So many brands unknown internationally, but very much alive in the People’s Republic, where they are squabbling for a few shares of the largest world market. According to S&P Global forecasts, China is expected to sell more than 24 million vehicles in 2024, or 32.6% of the global total.
BYD, number one car manufacturer in China
BYD alone, the leading manufacturer on the market, sold more than 3.1 million units in 2023. You have to walk along the port of Yantian, third in size in the country, and its row of cranes to visit this group located in Shenzhen.
Although the doors of the assembly plants of BYD, originally a battery manufacturer, remained closed to us, we were able to enter one of its gigafactories, established since 2008 in the Pinshang district. Unlike its European counterparts in the construction or start-up phase (often chaotic), this factory with a capacity of 14 gigawatts is running at full capacity to produce 600,000 lithium-ion cells per year, intended to equip utility vehicles. and stationary energy storage systems. Under its austere shell, the building houses a 1.6 kilometer assembly line.
Crossing a long white corridor shows the entire industrial process, from the processing of raw materials to cooking, including “coating” at a speed of 17 meters per minute. The heat emanating from the ovens is reflected on the windows, which take on an orange color. On the other side, only a few workers in blue overalls, equipped with a cap and a protective mask, are active in the succession of clean rooms to monitor that the highly automated process is taking place without a hitch. Twenty-one days are required to manufacture a cell.
BYD, the number one automobile manufacturer in China, controls this industry like the back of its hand. The company with 90,000 engineers has set up its headquarters a stone’s throw from the factory. A real city within a city with its apartment towers, schools, soccer fields and even its own skytrain.
In the country, the group has already attracted many drivers and is now focusing on its international expansion with factories planned in Hungary, Turkey and Brazil. “I love my car because it is beautiful and easy to use,” laughs our driver Didi (Chinese equivalent of Uber) on the road to Canton, a two-hour drive north, driving a BYD Tan. Arriving at its destination, this small SUV, armored with technology and constantly emitting sound signals, parks between an old Peugeot 301 and a Citroën C5X – proof that not all French cars have deserted the country, despite the gradual disengagement of Stellantis from this unforgiving market.
An army of robots
Outside, a vast, brand new industrial complex borders the avenue. The factory, owned by the young company Xpeng, has only been operational since the end of 2023. The modernity and quality of the machine tools are astonishing. The sheet metal workshop is the best example: ultra-automated, it is home to an army of 586 metallic gray ABB robots. They occupy the entire visual field inside the walls, where only a few human operators make their way. At the most important stage of the process, when the crate in white comes to life, it only takes a few seconds for the machines to grab the pieces of metal and cut through the air with disconcerting speed before precisely carrying out a few dozen of welding points, in a twirling ballet.
In this industrial base, which at first glance resembles any automobile factory, innovative processes are scattered here and there. This is particularly the case for “gigacasting”, a high-pressure aluminum casting process popularized by the American firm Tesla.
In a building adjacent to the Xpeng factory, the supplier Guangdong Hongtu Technology operates three presses of 7,000, 12,000 and even…16,000 tonnes, manufactured by the Chinese group LK. The view of this last press, around fifteen meters high, is impressive. By its size, by its speed in producing a part weighing several dozen kilos in a few seconds. But above all… because it exists. “The amount of energy and development time do not currently justify the manufacture of presses of more than 12,000 tonnes for the automobile industry”, an expert explained shortly before The New Factory. This analysis seems to have been undermined by this supplier. China, the world’s leading automotive market where technological innovation reigns supreme, does not hesitate to make bets, sometimes costly and going against the grain.
Xpeng driven by its “tech” approach
On the Xpeng assembly line, however, the cars move at a slow pace on the conveyors, where many young men are busy. When leaving the assembly line, many vehicles undergo alterations – like this bumper torn off by hand by a worker. Despite the deployment of the latest technologies, everything is not yet automated and the rise in industrial capacity continues. The factory we are walking through can produce 120,000 vehicles per year, or around 400 per day. But regularity is not always there, as evidenced by the hundreds of underbody boxes piled up in a corner. Not easy for a company founded in 2014 to become a market leader in such a short time.
Xpeng is just one of many Chinese companies that have launched into the automotive sector with great ambitions. Banking on its “tech” approach to vehicles, the firm convinces and attracts investors. Supported by Alibaba, it also welcomed Volkswagen into its capital (4.99%). But the brand operates in an ultra-competitive local market, where the plethora of players complicates access to notoriety and sales volumes. Xpeng has sold just over 400,000 vehicles since the launch of its first model, the G3, in 2016. Despite a manufacturing capacity soon approaching 600,000 vehicles per year, it has only delivered 141,601 in 2023, far from its objective of 200,000… And light years from a BYD.
A detour to the Beijing motor show proves to what extent the Chinese market is in full swing and in complete restructuring. “It’s all about showing up, right?” says a British financial analyst in front of the Cadillac stand. The American brands of General Motors and Ford are present in force despite plummeting sales in the country. Now, they are surrounded by brands often unknown to the Western public such as Jetour, adventure 4x4s in the style of Jeep. Moreover, the surprise guest of the show is… a smartphone manufacturer. The SU7, first model of Xiaomihas been a sensation since its launch in March, with more than 100,000 orders recorded. A long queue extends in front of its huge stand, which accommodates several examples of its vehicle, whose shapes are strongly reminiscent of the Porsche Taycan.
The plethora of manufacturers and models should not mask the reality of a market that is certainly booming, but where many players are losing a lot of money. Xiaomi, despite its success, is no exception. New models follow one another at breakneck speed, developed at breakneck speed by manufacturers who do not hesitate to rebadge their creations, that is to say, to resell them to another manufacturer, who will market them under its brand, after commercial failures. “There are too many brands, asserts Gloria Li, one of the many influencers present at the show. I think cars have too many gadgets and that brands don’t beta test enough of the software and components they install in them and which age poorly. In China, everything moves very quickly. Too quickly, undoubtedly, especially for Western manufacturers like Volkswagen, who are struggling to find the right formula to compete in the electric vehicle segment.
Towards consolidation by 2030
Will the global automobile market experience major consolidation in the years to come, against a backdrop of a shift towards electromobility?= And will there remain only four or five manufacturers, as envisaged by the boss of Stellantis, Carlos Your vares? If most analysts consider this scenario a little extreme, it is certain that there will not be room for everyone and that not all manufacturers will survive alone in their corner. Already, certain brands, such as the American Fisker, are forced to file for bankruptcy. This is also true in China, where nearly 200 brands are fighting to emerge as tomorrow’s automobile champions. AlixPartners predicts that only 19 of China’s 137 electric car brands will be profitable by the end of the decade. Currently, almost all of these are largely subsidized and loss-making, operating in a very competitive market and constantly looking for new products. In China, the marketing period for a local model is very short: between one and two years compared to three on average for its international competitors.
Source: www.usinenouvelle.com
