Chinese Manufacturers Begin to Erode Toyota and VW's Dominance in the Global Market

KatadataOTO – Chinese car manufacturers are expected to become more aggressive in capturing the global automotive market. The increasing production of vehicles outside of China, coupled with their strong electrification segment and production costs, makes them a force to be reckoned with.

It is not impossible that the map of the global car market will change in the future. If the industry's development pace continues, Chinese car manufacturers could control a third of the global market within five years.

UBS, a Swiss financial services company, revealed that the domestic market is still the backbone for now. However, expansion outside of China is also becoming increasingly important as it now accounts for 20 percent of their industry.

Chinese manufacturers are also seen as successfully leveraging their advantages in the electrification segment as European manufacturers retreat from the competition.

Photo: Katadata

The main obstacles are caused by the slowing adoption of electric vehicles in Europe and the imposition of import tariffs on Chinese EVs. Growth in 2024 is indeed slower than expected but continues to increase,” said Paul Gong, a UBS Analyst

He also predicts that the rise of Chinese brands could reduce the dominance of global automotive industry leaders. Volkswagen and Toyota, which have long dominated 81 markets in several key segments, are expected to face pressure.

They even predict that the market share of these two brands will drop to just 58 percent by 2030.

Pressure also comes from several countries that provide significant opportunities for Chinese vehicle manufacturers to invest. Southeast Asia has become one of the important regions.

Indonesia, for example, has provided various incentives for manufacturers to build factories. Several brands have finally committed to building production facilities

BYD, for example, has built a factory in Subang, West Java. The production capacity of the facility is claimed to reach 150,000 units per year.

That figure is much larger than their sales in 2025, which amounted to 44,342 units. Therefore, the presence of the production facility is believed to be able to meet all consumer demand.

Photo: BYD

Besides BYD, GAC Aion has also inaugurated their factory located in Purwakarta. The facility was established as a result of a collaboration with the Indomobil Group.

“The factory will be built in several stages. For the first phase, the production total will be 20,000 units, and in the future, it can increase to 50,000 units per year,” said Wei Haigang, President of GAC International, during the inauguration some time ago.