China’s motor market competition reached a fever pitch:
who will be the dominant player?
Motor market, a key part in new energy vehicles (also NEVs), attracts huge investment from all sides. Statistics show that China has 200 plus motor suppliers for NEVs and the motor market is less centralized.
Since 2017, foreign makers such as BorgWarner, Continental AG, Siemens and Bosch have accelerated their localization efforts to expand market shares in China. The competition heats up.
On the whole, China’s motor market is marked by a spectacular free-for-all as companies, big or small, fell over one another in a mad rush to become the dominant player in a brand-new business. Who will become the market leader? Will it be Auto maker? Newcomer? The third-party electric motor maker? Or foreign motor maker? Let time tells.
The market has run into a free-for-all
China;s electric motor makers fall into 3 types: the auto makers such as BYD, SAIC Motor, Yutong Bus, Golden Dragon, Yuchai Group and etc; the third-party electric motor suppliers like Broad-Ocean Motors and Jiangte, and motor suppliers for NEVs like Jing-Jin Electric, Shanghai Edrive and Shanghai Dajun; and auto parts giants including Boshi, BorgWarner and ZF Group that have been gaining market share in NEVs market.
Obviously, auto makers and the third party electric motor suppliers enjoy more advantages as they usually work together. Besides, more and more auto makers decided to develop their own motors through joint-venture, share holding or independent R&D in efforts to cut down costs and integrate resources.
According to GGII, the top 10 installers for electric motors in China include BYD, BAIC BJEV, Jing-Jin Electric, Shanghai Edrive and JMEV, all of which account for 57.56 percent of the total. And 4 of them are car makers whose total installations exceed 60 percent.
China’s motor market is partitioned by auto makers and the third party electric motor suppliers. But the author noted that although foreign motor makers have smaller slice of the market, they have been gaining market shares in NEV motor market.
The author also found that the main motor providers for passenger vehicles are auto makers and the third party motor suppliers such as Jing-Jin Electric and Shanghai Dajun, while the motor suppliers for special vehicles are more plentiful and the market is less monopolized.
Further cooperation with foreign companies
In recent two years, with an increase in mergers, acquisitions and joint-ventures in NEV motor market, domestic electric motor makers extended cooperation with overseas companies.
Analysts said, some domestic companies started to cooperate with foreign electric motor makers to enhance their competitive edges.
On the one hand, China’s auto makers such as BAIC BJEV, Chery and JAC established joint ventures with foreign auto parts giants, including Chery & Yaskawa, and JAC & JEE. BAIC BJEV not only established joint venture with Broad-ocean Motors, but develop motor-driven system with Siemens.
Auto makers said, as the government cuts down subsidies, auto manufacturers that can develop and produce core parts are able to set prices or control costs more efficiently.
On the other hand, auto parts supplier started to work with foreign companies to expand their businesses in NEV motors market, including Huayu Auto & Magna, China Camel & Rimac, Zhejiang VIE & Protean Holdings Corp.
Actually, a wave of merger and acquisitions have swept across the NEV motor industry couples of years ago. At that time, Broad-ocean Motors bought Shanghai Edrive, Zhenghai Magnetic Material took over Shanghai Dajun, and Ningbo Yunsheng acquired Nikko Motor.
Since 2017, foreign motor makers are speeding their localization efforts, including Valeo, Siemens and Boshi that have started their businesses in China’s NEV market to expand their market shares. Valeo and Siemens jointly build factory in Changshu, Jiangsu province to supply car makers with electric motors.
Additionally, a source revealed that multinationals such as Valeo and Continental AG had made lowball offers to China’s car makers with an aim to grab more market shares.
The source said, “ Foreign motor suppliers enjoy advantages on cost control. They can buy core components with lower price.” As these companies enter into China, price decline is unavoidable.
It is understood that foreign companies including Boshi have priced their electric drive system (electric motor+controller+reducer) at less than RMB 10,000.
However, it will take RMB 25,000 to produce motors for NEVs and RMB 70,000 - 120,000 to produce motor systems for commercial vehicles, as they fail to be mass produced, and the material price goes up.