Reflections on China's Transformation of the Car Industry, Part G: Acknowledge Mistakes
“The bravest thing you can do often begins with a single step – acknowledging your fear.”
Agile software development, rooted in Lean car manufacturing principles, emerged during a pivotal revolution in the 1980s. Now, we are witnessing another, much greater, transformation in the automotive industry—one that may offer valuable lessons. In this series:
Part A: The Disruptions
Part D: Traditional Car Manufacturers Reluctant to Evolve 👎🏾
Part F: Lacking on Plan B and C 👎🏾
Part G: Acknowledge Mistakes
The situation is going to be far worse for traditional car manufacturers in the coming years, yes, those could go down. We have heard those CEOs saying
“EV will not take over internal combustion engine (ICE) cars”
Source: Fortune Then, “EV will never be cheap”.
They were wrong, and many of them have stepped down.
The clock is ticking. Just last month, we saw the news of the Honda-Nissan-Mitsubshi merge.
There might still be opportunities for traditional car manufacturers to innovate technologically and make drastic changes in terms of product strategy and pricing. Whether they like it or not, Chinese EVs are eating their market shares quickly.
Just take Australia as an example, only a small percentage of Australians were aware of Chinese Car Brands, and the impression is low-end cheap cars (my neighbour has one).
Then, gradually I notice fancy good-looking new Chinese cars, such as the BYD Sealion-6, on the road.
BYD
Needless to say. BYD is huge now.
Source: Drive (AU) The newly launched BY Shark 6 ute has become a massive hit.
Source: Drive (AU)
Yesterday (2025-01-10), BYD Australia announced its first-ever EV under A$30,000 in Australia.
Source: CarExpert (AU) Geely
About to release its first EV, EX5, next month in Australia. There will be several more models coming.
Source: CarGuide (AU) Zeekr
Two models X and 009 are available to order now. The highly anticipated 7X is supposed to come to Australia too.
Source: CarExpert (AU) XPeng
Three models were announced, and one (G6) is available to purchase now.
It is highly likely the hot-selling (in China) two new models Mona 03 and P7+ are coming to Australia too.LeapMotor
I hadn’t heard of this brand until two weeks ago, there is already one EV SUV on sale at A$45,888.
There are many more, check the news below.
Traditional car manufacturers have every reason to be concerned. The Australian car market is highly mature, with little room for significant growth in annual sales numbers. In other words, it’s a zero-sum game. The arrival of Chinese EVs inevitably means losses for established brands like Toyota, Volkswagen, and others. If you do a Google search, sales of nearly all traditional brands in all regions are going down and Chinese EVs getting high growth.
Chinese EVs no longer mean “poor quality” or “Low-Tech"
The EV market is a new territory, and Chinese car manufacturers are leading in many aspects. For instance, in EV battery technology, Tesla relies on CATL, a prominent Chinese brand.
Moreover, if you’ve explored what luxury Chinese brands like 7X have to offer (check out some YouTube videos), you’d be absolutely amazed—so advanced! This is precisely why BBA (Benz, BMW, and Audi) have seen significant declines in sales figures in China, even with substantial discounts of over 40%.
To write this article, I checked dozens of car reviews on Australia’s authoritative sites, such as drive.com.au and carsales.com.au. The rating is between 6-8, which is considerably not bad, on par with major brands.
BYD Sealion 6 just won the Car of the Year award in New Zealand.
The new BYD Shark 6 UTF won the Car of the Year in Australia.
Please note that the references I’ve provided above come from major Western news outlets and reputable car websites.
Layoff has already started in Germany and Japan
DW described the German car industry as being "in crisis."
More scary is yet to come for traditional car manufacturers: Chinese EV Maufactorer release new models quickly
It appears that Chinese EV manufacturers are following the same formula that Japanese carmakers used to dominate the global market starting in the 1970s: agility. (In fact, Agile in software development was deprived of Lean Manufacturing principles, The Toyota Way)
Now, there are several new EV models being released in China every month—yes, that's right, every month. It's truly remarkable.
I’ve been a happy owner of Japanese cars (Honda and Mazda) for over 25 years. However, despite having 5 or 6 years between model updates, there were rarely any substantial changes (including pricing). A similar example that resonates with us software professionals is Intel’s release of processors over the past two decades, often referred to as "squeezing toothpaste." Now, Intel is facing challenges from Apple’s CPUs and AMD.
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