Insight on auto industry in China | KPMG | GLOBAL
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Insight on auto industry in China

Insight on auto industry in China

China can no longer be regarded as emerging. It’s one of the world’s most dynamic markets.


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Huu Hoi Tran, KPMG's Head of Automotive in China, gives insight into the Chinese automotive market

China can no longer be regarded as emerging. It’s one of the world’s most dynamic markets and in the next two years will experience rapid changes. China's government is keen to modernize the auto industry and create flexible opportunities for consumers.

Regulation is traditionally strict in China and today’s government is helping foster new technologies and innovations that can leapfrog the traditional technological path that has taken years in the rest of the world. Connected cars and New Energy Vehicles (NEVs) will be a focus in the coming decades. Consumers buying electric cars or those with lower car emissions will benefit from savings direct from the government.

Despite alternative mobility options helping reduce traffic issues in this increasingly urbanized society, car ownership is still a priority and a status symbol for Chinese consumers.

The control of license plates – and hence car ownership – is challenging, especially in Tier 1and 2 cities. Whereas another Asian city, Bangkok, runs a lottery, Shanghai has a fiercely competitive bidding system. But new mobility will enrich the mobility landscape in urbanizing China. 

Chinese OEMs (original equipment manufacturers) are finding their place in the local market and across Southeast Asia. German, Japanese, Korean and American auto manufacturers have their own priority regions. The future is wide open, but Chinese OEMs may focus on the increasing demand for electric cars, especially in large cities. They are becoming more aware of the need for ICT (information and communication technology) and financial services, developing their business models to benefit China's connected consumers.

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