The automotive sector in China is growing fast, but it is growing in a transformative way that is not just linked to the sale of new cars. This is how the success of the sector has largely been judged for decades—more sales equals more success, but China is not only seeing more sales, but transformation too.
Take Didi Chuxing as a great example. Didi is the only real global challenger to Uber in the ride-hailing market. There are many local companies in this space, but Didi is offering ride hailing across the world using a variety of brands. But how is Didi shaping the way the entire automotive sector is looking?
They are now leading research into the future of the entire industry and working with 31 different auto manufacturers. All the brands you will recognize, such as Nissan, VW, and Toyota, are working with Didi to plan the future for transportation, exploring such areas as electric vehicles and autonomous vehicles.
Domestic sales for new cars in China grew 4.5% in the past year and sales volumes are enormous. It is this combination of sales growth and volume that makes it attractive for the auto brands to work with Didi on plans for the future. With so many brands in their research portfolio it seems likely that the next wave of automotive innovation will not come from Silicon Valley, it will be from China.
Change is taking place fast in China. In the US there is a focus on new brands such as Tesla, but the scale in China is breathtaking. In the past year, over one million new electric vehicles have been registered and growth in the sale of electric vehicles is increasing at 28.7% . In China, these emerging technologies are being deployed in the millions, not thousands.
The demand for new vehicles in China is currently around 30 million new registrations per year, which offers a fantastic opportunity not only for new sales, but also the volume to experiment with the future. It’s no surprise that technology and AI-focused brands like Didi are focusing on the Chinese market as a testing ground for the future of vehicles globally.
Your next new car might be electric, it may also be self-driving, and it will probably be Chinese or based on research that took place in China. Let me know what you think about this change in the global automotive market by leaving a comment here.