The latest edition of Shanghai’s annual motor show made one thing clear: the rising influence of China on the global automotive stage is no longer a passing trend, but a fully-fledged transformation in the making. What began a few years ago has accelerated at pace, driven by the challenges facing the industry in Europe, the US and across emerging markets.
The incredible ascent of China
Not only have China’s carmakers developed a stranglehold on their domestic market, but they are expanding at pace overseas, with their rapid growth resulting in declining market share for legacy car manufacturers that dominated sales in China decades. We have reached a point where the Chinese-made car is now the most attractive passenger vehicle in Central Asia, Russia, regions such as Southeast Asia and the Middle East, and in certain parts of Africa and Latin America.
Between 2023 and 2024, Chinese automakers saw their market share grow in every region in which they have a presence. According to JATO Dynamics data, combined with that of third-party sources for certain markets, Chinese automakers increased their domestic market share by more than nine percentage points over this period, with further growth in market share in regions including Central Asia (+7.5 points), Southeast Asia (+2.5 points), and Africa (+2.5 points). Correspondingly, rival automakers from Europe, Japan, Korea and the US have witnessed their share of the market shrink.
The rapid growth in popularity of Chinese car brands is something that caught traditional automakers by surprise, and as a result many were unprepared. This trend is not limited to China, where non-Chinese brands have seen their market share dwindle from 65% in 2019 to 42% last year. The real battleground is in countries such as Thailand, Malaysia, Indonesia, Brazil and Russia, and regions like the Middle East and Central Asia.
The impact on the shift to electrification
The rise in influence of China’s automakers, to the detriment of traditional players, is even more pronounced in the battery electric vehicle (BEV) segment, in which Chinese players generated 55% of sales globally last year – up from 50% in 2023. US automakers, including Tesla, accounted for 20% of global BEV sales. European manufacturers followed with 17% of the total.
China’s influence in the BEV segment is further demonstrated by the traction their OEMs are gaining beyond their domestic market. Across Mexico, Brazil, Argentina and Chile, Chinese brands accounted for 82% of BEV sales in 2024 – a remarkably high percentage, particularly given that BEVs do not yet enjoy widespread popularity in Latin America. With a market share of 85% in Southeast Asia, the situation is similar. Significantly, their dominance is not limited to emerging economies: Chinese brands generated almost 40% of total BEV sales in Australia and New Zealand combined.
In Europe and the US, high prices and deeper structural factors are holding back BEV adoption, but China’s ambition to develop a foothold in both markets has long been clear.
As countries navigate the shift to electrification, batteries have become the industry’s holy grail. But again, it is here that China has an advantage as the only country to have complete control over the full battery supply chain. This exemplifies why Western automakers are struggling to compete with their Chinese counterparts. Meanwhile, the lower cost of labour in China is another key factor behind this gap in competitiveness.
As a result of these contributing factors, the market share of BEVs in Europe fell slightly from 15.7% 2023 to 15.4% in 2024. Meanwhile, in the US the introduction of new electric models from Ford and General Motors, as well as the dominance of Tesla, have not helped the market share for the BEV segment surpass 9%.
The response from the West
This situation becomes increasingly critical as countries’ zero-emissions deadlines loom ever closer. This explains why the longstanding relationship between the West and China in the automotive industry, in which the latter followed the example of the former, has now reversed.
This shift can be witnessed at the industry’s motor shows, such as in Shanghai, where the spotlight now remains firmly focused on the offering of Chinese brands, and not on those of legacy automakers. In Shanghai this year, only 18 of the 34 foreign brands that typically attend the event were present, and of which only six revealed entirely new models. Brands such as Skoda, Jeep, DS and Jaguar are among those to have exited or began to retreat from the Chinese market.
The response from Western’s automakers – to collaborate more closely with China – is the right course of action. Until 2019, most foreign carmakers in China operated through mandatory joint ventures with local firms, with Tesla being the notable exception. These 50:50 partnerships gave international brands easier access to the Chinese market, while Chinese companies gained the know-how to produce globally competitive vehicles. For years, this arrangement favoured the foreign firms, yet the balance shifted in the aftermath of the pandemic, as Chinese consumers increasingly gravitated towards domestic brands that better suited their preferences.
Now, as legacy automakers face losing further ground in China and stagnation in their home markets, those from Europe, Japan, Korea and the US are increasingly turning to their Chinese counterparts for support. This shift was on full display at Shanghai Auto 2025. “If you can’t beat them, join them,” as the saying goes.
The Nissan Frontier Pro: a case in point
The major legacy players in the global automotive industry are now leaning on Chinese partners – and not just for access, but for innovation. Put simply, the roles have reversed. Instead of sharing knowledge with Chinese firms, legacy brands are tapping into the strengths of China's automakers to create competitive vehicles with global appeal.
Models such as Nissan’s Frontier Pro and N7, the Honda GT, Audi E5, Toyota bZ7, Lexus ES, and Mazda EZ-60 illustrate the new state of play between Western carmakers and their Chinese counterparts.
Perhaps the standout example is the Nissan Frontier Pro. While it wears the Nissan badge, it is produced in close collaboration with Dongfeng, Nissan’s longstanding joint venture partner in China. In essence, the Frontier Pro is more Dongfeng than traditional Nissan. Designed with Chinese DNA, at a price point that is attractive to consumers in China and beyond, this model is expected to replace Nissan’s existing Navara model in key markets including Thailand, Australia and South Africa. This approach allows Nissan to kill two birds with one stone, by offering what is essentially a Chinese vehicle under the name of a trusted international brand.
The ripple effect is clear: production is shifting. Instead of making use of factories in multiple regions, legacy automakers are turning to joint venture facilities in China to manufacture these models. This strategy keeps costs down, allows Western brands to compete, and could be one part of the solution to how these companies compete with China’s increasingly dominant position in the global automotive industry.