Chinese automakers will have to break out of their home market to survive when the future is predicted to be very fierce.
The warning comes at a historic time for the global car industry.
Slowing growth and a fierce price war are pushing low-cost carmakers to the brink of collapse in China, the world’s largest auto market.
“To officially participate in the auto industry, you cannot be a car company that only sells in China but must be a global car company.
“In five to 10 years, the world will become a much more concentrated market.
The somewhat pessimistic prediction comes at a difficult time for Xpeng and China’s auto industry in general.
Xpeng’s sales fell 50% in the first quarter of 2023 and it ranked as the 12th largest electric vehicle maker in China.
The company sold more than 120,000 vehicles in 2022, then saw sales in the first quarter of this year drop nearly 50% as Tesla massively slashed prices on many models.
Xpeng is a Chinese car brand that has just gone through a difficult first quarter of 2023
In January, Xpeng was forced to follow this trend, cutting prices on three of its four car models by up to 13%.
Gu Hongdi said Chinese automakers will need to sell about 3 million vehicles a year to survive in the next decade.
The good news for Xpeng and other Chinese automakers is that the country’s exports are booming.
That growth is being driven by markets such as Europe and Asia.
He said the Chinese industry must `take the time to research and find ways to access that market`.
Currently, the US is the second largest automobile market in terms of volume, after China.
Xpeng, like all Chinese electric car makers, depends on American chip designers including Nvidia and Qualcomm for advanced semiconductors.
This has raised concerns that Chinese automakers could face difficulties as the US government expands restrictions on China’s access to the country’s advanced chip technology.
“So far, none of our partnerships have been affected by political trouble,” Gu added.
