At the 2025 myplates Industry Forum, Steven Bragg, Partner at Pitcher Partners, delivered a detailed and fast-paced presentation on the Chinese automotive sector’s extraordinary transformation. His analysis traced how China has evolved from a struggling industry newcomer to the world’s dominant vehicle producer — and why Australian automotive and fleet businesses must prepare for the changes already heading their way.
From Humble Beginnings to Global Leadership
China’s automotive industry began by attempting to replicate the success of Western OEMs in internal combustion engine (ICE) manufacturing. But as Bragg pointed out, “ICE engines are very difficult to manufacture – it’s taken the Germans and Americans a century to perfect them.” Early Chinese attempts were rudimentary, and even Elon Musk once mocked BYD’s early models.
Yet in less than two decades, the transformation has been extraordinary. Early EVs – globally – were often made deliberately unattractive because OEMs lost money on them. Today, Chinese brands are producing vehicles that rival, and often surpass, Western competitors in design, quality, and technology, while undercutting them on price.
Scale, Strategy and Speed
One of China’s greatest advantages is scale – a population of 1.6 billion and the manufacturing capacity to match. Bragg highlighted the difference between Chinese industrial planning and that of Australia or the US:
“They set a target and achieve it. We can’t do that – our plan is to sell it and hope it goes well.”
Government direction, combined with an ability to move quickly, has allowed China to transition entire industries in a single generation. The same focus that transformed Shanghai’s skyline in 30 years has been applied to automotive manufacturing.
The Flat-Screen TV Playbook
Bragg compared the current automotive push to China’s earlier dominance in flat-screen TVs. Brands like TCL started by producing low-cost units, driving competitors out of business, then acquiring their intellectual property. The same low-cost, high-volume, government-backed model is now being applied to cars.
China is already the world’s largest vehicle exporter, expected to ship around 6 million units in 2024 and potentially 8 million by 2025. Production costs are 20–40% lower than competitors, thanks to control of the entire supply chain, including logistics. BYD, for example, owns its own fleet of roll-on/roll-off ships.
Global Disruption and Policy Responses
Legacy markets are struggling to keep pace. Western OEM product cycles take 5–7 years from concept to showroom; Chinese brands can launch new models in 18 months. Policy shifts in the US and Europe have created further uncertainty.
Tariffs are being used as a defensive measure – “a timeout” in Bragg’s words – to give domestic manufacturers breathing space. The US, Canada and others have moved to block or heavily tax Chinese EV imports, citing both economic and security concerns.
The Price War in China
Despite their advantages, Chinese manufacturers face challenges at home. A price war, described by some as the industry’s “Evergrande moment”, has seen intense discounting. The government has intervened to stop the race to the bottom, but overcapacity remains.
Bragg noted that Chinese factories are often running at just 15% of capacity, yet could collectively produce 60 million cars annually – more than global demand. In 2020, EV penetration in China was just 1%; it’s now over 50%, driven by mandates and subsidies.
Market Volatility and Brand Survival
The Chinese market has seen around 50 automotive bankruptcies or consolidations since 2000, and Bragg expects that number to climb to over 200 within five years. In the early 1900s the US had over 200 carmakers – today only Ford, GM and Stellantis remain. China may consolidate down to as few as ten major players.
In Australia, Chinese brands now account for roughly 20% of sales, with projections of at least 50% within five years. Bragg’s advice:
“Dealers and industry need to pay attention – one in five cars sold here is already Chinese.”
State-Owned Giants vs Private Innovators
Most large Chinese manufacturers are state-backed, either centrally (e.g. FAW, SAIC, GAC) or provincially (e.g. Chery in Anhui, Geely in Zhejiang). Their purpose is not only profit but employment – keeping a massive population working and economically stable.
Private brands, often the ones expanding into Australia, are agile and innovative. Many have aligned with major tech companies such as Huawei, Xiaomi and Alibaba, creating vehicles that integrate deeply with connected ecosystems.
Cars as the Next Smartphones
Bragg sees a future where cars are sold like mobile phones – on subscription plans, integrated into a single technology ecosystem. An “Apple Car” or “Samsung Car” could be financed and supported alongside other devices, with brand loyalty spanning home electronics, personal devices and vehicles.
This shift will also affect commercial vehicles, with electrification and AI integration enabling new business models for transport and logistics.
Technology and AI Leadership
China is the global leader in battery production, rare earth refining, and EV manufacturing. It also dominates in automotive AI, with facial recognition and connected services standard in many models. In cities like Shanghai, the result is cleaner air, quieter streets, and a near-total shift to electric transport, including bikes and scooters.
The level of in-car technology, Bragg said, is “a million times better than anything we have here”, often at half the price of equivalent Western models.
Security Concerns and Geopolitical Tensions
The connectivity that enables advanced AI features also raises security issues. US and Canadian bans on Chinese vehicles have cited fears they could be remotely disabled. These measures, combined with tariffs, are reshaping global automotive trade routes and investment plans. BYD, for example, has shelved proposed factories in Mexico and Canada.
What It Means for Australia
Australia’s open market, lack of domestic manufacturing, and growing EV demand make it a prime target for Chinese brands. More than 50 are reportedly planning to enter the market, bringing intense competition.
However, Bragg noted that not all will survive:
“The key is staying power. My money’s on the state-owned brands – they’ve got longevity.”
Strategic Takeaways for the Industry
Bragg’s presentation offered a number of strategic implications for the Australian automotive and fleet sectors:
- Prepare for price disruption – Chinese overcapacity and efficiency will keep downward pressure on prices.
- Expect rapid model cycles – new competitors can bring vehicles to market in less than two years.
- Understand the brand landscape – state-backed giants vs nimble private players have different strengths.
- Watch tech-company partnerships – integration with consumer electronics ecosystems will shape buyer expectations.
- Anticipate consolidation – many new entrants won’t survive, so choose supply partners with staying power.
- Consider security and data – connected vehicles raise new questions for fleet policies and procurement.
