![]() International legacy automakers had just 8 percent of China's plug-in vehicle market in the final quarter of last year, and many of their EV offerings are not competitive with local ones on price, range and features. Automotive product planning cycles are long, and many legacy automakers misjudged how fast the Chinese market was shifting to EVs. The rise of electric vehicles is the most important factor upending the automotive pecking order in China. Premium brands have generally fared better than mass market ones. Toyota's sales in China have held up reasonably well, but its Japanese peers Nissan and Honda have seen big drops in the last few years. There is quite a bit of variation between legacy automakers in terms of how well they have fared. There should be a slight bounce back in the first half of this year, as these manufacturers clear out old inventory, but BloombergNEF expects their overall share this year to be well below 50 percent. International legacy automakers have watched their share of the market shrink from 61 percent in 2020 to 41 percent in the final quarter of last year. That near-term swagger hides an uncomfortable point for established automakers: Many of them are slowly but steadily getting squeezed out of the Chinese auto market. Volkswagen Group CEO Oliver Blume seemed to come away bullish from his visit in February, and others such as BMW have offered similarly positive sentiment. Legacy automakers have been sounding optimistic lately about vehicle sales in China heading higher following the great reopening.
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