The global car industry is at a crossroads. In Europe, debates over banning cheap Chinese electric vehicles (EVs) are heating up.
Policymakers are concerned about protecting local automakers from the flood of affordable imports.
Meanwhile, in China — the world’s largest auto market — the landscape is shifting rapidly, according to Digi24.
Foreign manufacturers, once dominant, are being squeezed out by innovative domestic competitors.
From Dominance to Decline
General Motors (GM), a longtime leader in China, is grappling with a steep decline. Once a critical market during GM’s financial struggles in the late 2000s, China has become a financial burden.
GM’s sales dropped 19% in the first nine months of this year, contributing to losses of $347 million in the same period.
The company expects over $5 billion in reduced net income, half of which is tied to restructuring efforts in China.
Jeff Schuster, vice president of GlobalData, highlighted this dramatic reversal:
"Fifteen years ago, GM’s operations in China were their lifeline. Now, it’s just a constant drain."
Local EV makers have taken over, claiming 70% of the market — a sharp rise from 38% just five years ago.
Supported by government subsidies and policies favoring green energy, Chinese automakers produce vehicles that cater to local tastes and budgets.
Foreign brands, by contrast, have struggled to keep up with the rapid shift to electrification.
Michael Dunne, an industry consultant, described the changes as a "turning point" for foreign manufacturers. “It’s an era of reckoning for global brands in China,” he added.
Experts warn that many Western automakers may exit China entirely within the next five years. However, Bill Russo, a Shanghai-based consultant, cautioned against leaving the lucrative market:
"Losing China would be catastrophic. But companies often prioritize short-term profits over long-term viability."
Western automakers now face a difficult choice: adapt to China’s evolving market or risk irrelevance in the world’s largest auto economy.
