Mobility Global Inc. published New Order: China, the West and the Battle for Automotive Advantage on Tuesday, laying out how the industry's center of gravity is shifting. The firm, which became independent from S&P Global Inc. in July, says legacy automakers will struggle to go toe to toe with Chinese rivals on pricing and may already have squandered the early lead on electric and software-developed models.
The analysts still give incumbents the edge in premium brands, safety-led engineering chops, and fleet relationships. But they see Chinese groups outpacing in the broader market thanks to sheer manufacturing scale, quicker model development, and lower cost structures.
In an interview, Calum MacRae - Mobility Global's executive director and a co-author of the paper - put it this way: "The competition is just going to become more intense," and it is coming as "total industry volume" is likely to stay flat, with global demand for passenger vehicles sluggish.
The report argues this is not a repeat of earlier waves from Japan or South Korea. Software is now reshaping how cars are built and sold, and Chinese automakers have benefited from that shift, along with supportive financing channels built to nurture a domestic auto ecosystem. As the authors put it, "This shock is different because China's advantages are much harder to replicate. What is being imported now is either a software-driven experience with rapid feature updates or a cost advantage that is reinforced by preferential financial and supplier-backed working capital."
The influx of China-made cars reflects an industry producing more vehicles than buyers. S&P Global Ratings expects China's auto sales to contract through 2028, then level out at around 20 million a year. In a separate report Tuesday, S&P Global Ratings credit analyst Vittoria Ferraris wrote that "China's weak domestic demand will continue driving excess production to accessible global markets such as Southeast Asia, Europe, South America, the Middle East, and Africa, creating disruptive competitive pressures across the industry."
Pricing power in China is the test legacy carmakers keep failing. Market Briefs covers the auto trade free every weekday.
With exports stirring political pushback, some governments have tightened rules or effectively blocked shipments from China. Mobility Global views that as a prelude to more Chinese-brand manufacturing on the ground in overseas markets. First comes investment into existing plants, then a shift to building new facilities.
To utilize unused capacity, Chinese manufacturers are already entering into partnerships via joint ventures with several well-known European carmakers. That route taps into local logistics networks and workforces, while leveraging Chinese supply chains for core components. As market share builds, Mobility Global expects brands to pivot to their own factories.
By 2030, the firm projects output from newly built greenfield plants in Western Europe will surpass older brownfield sites, with localized production of Chinese brands approaching 1.1 million vehicles. Brownfields are a "low risk, low friction option" to start, MacRae said, and once brands secure a foothold "it's natural that you start localizing production and investing in your own facilities."
Beyond the EU, the path into the US is murkier. MacRae said it is hard to forecast Chinese-brand entry given that imports from China are largely blocked. He noted that companies like Great Wall Motor Co., which builds a broad lineup including pickup trucks, could one day resonate with cost conscious American buyers.
BYD Co., identified as China's largest carmaker, is looking to bypass joint ventures and go straight to building its own plants. Stella Li, who heads BYD's overseas business, told Bloomberg on Monday that by the end of the decade the company plans to rank among Europe's leading producers and to recruit up to 40,000 employees in the region. BYD is constructing a factory in Hungary and is also considering new sites in France and Spain.
For investors watching autos, the map is splitting: established brands defend high end, safety, and fleet niches, while Chinese players press their cost and software edge in the mass market and localize production where trade doors are open. If Mobility Global's timeline holds, Western Europe could be assembling roughly 1.1 million Chinese-brand cars annually by 2030, with new plants doing more of the heavy lifting than inherited sites.
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