Automotive brand growth in China, for China and from China.

A lot hast been written about battery and software technology comparing Chinese with Western OEMs, but many of you have asked me about my thoughts on the challenges of sales and marketing for passenger car brands when it comes to China. Here is my personal view. ?

There are countless Chinese NEV brands which are totally focused on their home market fighting each other in the first place: Expensive showrooms, pop-up-stores and promotional spaces in shopping malls, unbelievably aggressive prices and paid media campaigns that are burning too much cash to pay back investors quickly. For new and old Chinese brands, it's all about selling cars and growing share fast in their highly competitive home market. But re-financing has become more difficult with higher interest rates and new economic challenges. First brands have started to be seriously harmed and might gradually be disappearing.

Western auto brands, consequently, suffer enormously from this “China for China” situation as they continue to lack visible high-street and in-traffic presence of their EVs. This is resulting from mostly traditional suburban dealerships and low adoption and penetration rates of their latest models. Being late with product and software innovation and too traditional in their marketing approaches has not helped, nor has slashing prices.?

Chinese NEVs, however, do not build their brands systematically. There is no distinctiveness to position them successfully internationally. Pushing good-looking cheap cars abroad by mostly using the old school wholesale/retail model that Western OEMs have been trying to leave behind, is just not good enough. Foreign dealers who take on the wrong Chinese brand are facing serious challenges with customer experience, parts supply and used car re-marketing. Due to the lack of residual values, leasing and fleet sales are no profitable commercial options at this point in time either.?

Yet, I do expect the Chinese NEVs that survive the next financing rounds as well as more established Chinese OEMs to find new and sustainable commercial and growth investment strategies. This will allow them to take longer term views and get their brand qualities future-ready. They will also professionalize their internationalisation to scale by choosing more modern and adapted go-to-market approaches.?

All of this will buy some time for Western brands with good reputation in China to finally start localising more quickly and be more independent from their overseas headquarters in retail and communication. They will be able to transform their commercial operating models in China, build out modern agency/retail distribution networks and re-invent their marketing to become true direct-to-consumer companies, maybe even easier and earlier than back at home in Europe, the US, Korea or Japan.?

So, whoever or wherever you are with your brand: it's definitely time to act for China, in China and from China in sales and marketing to grow (independently from how big the tech gap already is today or might become in the future).