When Chinese cars make GM, Volkswagen… and Tesla look outdated

Faced with Western manufacturers still mired in their long and hierarchical processes, Chinese brands are setting a new industrial pace. Thanks to radical methods, extreme vertical integration, and a frenetic pace of development, they are reshuffling the deck in the global automotive industry.

In October 2023, one of Chery's engineers, Riccardo Tonelli, led an express overhaul of the Omoda 5 SUV for the European market. The vehicle, originally designed for China's smooth roads, had to be adapted to the uneven and winding roads of the Old Continent. In just six weeks, Chery modified the steering, brakes, traction control, shock absorbers, and tires, then began shipping the vehicles to European dealerships.

For Tonelli, who has worked for an Italian brand and a Korean manufacturer, such speed would be unimaginable at a European carmaker, where a similar modification would take at least a year.

A Chinese pace that is shaking the giants

This example illustrates the agility and responsiveness of Chinese manufacturers, which have not only regained control of their own automotive market, the largest in the world, but are also beginning to pose a serious threat to global leaders internationally. Chery has established itself as China's leading exporter, while BYD, the country's largest manufacturer, represents an even more serious long-term threat, according to several industry executives.

Their main weapon: development cycles that are half as long, if not shorter. According to AlixPartners, a new Chinese model spends an average of just 1.6 years on the domestic market, compared with 5.4 years for a foreign model.

At BYD, around 900,000 employees work at a single site in Shenzhen. Housing, transportation, and schools are all subsidized by the company. Unlike its competitors, BYD produces most of its components in-house. The result is drastically reduced development times.

Employees are subject to working hours reminiscent of the heyday of industrialization: six days a week, twelve hours a day, according to Peter Matkin, chief engineer at Chery.

A shift from the West to Asia

In 2024, BYD and Chery saw their global sales jump 40%, while Tesla experienced its first annual decline. Since 2020, the five largest foreign manufacturers in China have seen their sales fall by nearly a third, while the five leading Chinese players have doubled theirs.

Western giants are trying to respond: Volkswagen is collaborating with Xpeng, while Toyota and Stellantis are forming partnerships to draw inspiration from the Chinese model.

Once mocked for copying Toyota and Chevrolet, Chinese manufacturers are now reinventing automotive development. Their recipe: get "good enough" vehicles out quickly, reduce prototypes, focus on simulation, and adjust after launch.

Domestic competition, where 93 brands hold less than 0.1% of the market share, is driving constant innovation. And overcapacity is further increasing this pressure, with ever lower prices.

To survive, Chinese manufacturers are turning to international markets, where their cars are sold at high prices. And while Western brands retain a slight advantage in terms of perceived quality, they can no longer keep up on price.

In this race, speed is king. BYD, for example, has launched 40 new models since Tesla's Model Y in 2020, compared with just five models for the American manufacturer.

Radical but effective methods

Even Toyota was surprised by BYD's flexibility during the development of the bZ3 model. While the Japanese swear by successive prototypes, the Chinese have no qualms about changing everything at the last minute. Yet their vehicles still achieve five stars in Euro NCAP crash tests.

At Zeekr, Geely's premium brand, teams in China and Sweden work together around the clock, using artificial intelligence and design databases to optimize production and costs.

Western regulatory red tape also works against their champions. A former Volkswagen engineer recounts that a simple graphic change on a GPS required... 75,000 km of testing.

Chery, the ambitious outsider

Often overlooked in Europe, Chery is nevertheless becoming a serious threat. In 2024, it exported 1.14 million vehicles to over 100 countries. In addition to its combustion engine models, the brand is also developing gasoline, hybrid, and electric versions.

Its strength? Speed. Each model benefits from 5 to 10 digital designs, which are tested repeatedly. If a design is not satisfactory, it is replaced. In less than two years, a new model can be created from scratch.

The message is clear: Chinese manufacturers are no longer followers, but rather leaders which are rapidly gaining momentum. And yesterday's giants may well be tomorrow's also-rans.