Foreign automakers will have to embrace “agility” to adapt their vehicle development processes to feed the growing appetite of Chinese customers for in-car technologies, if they want to arrest their sliding market share in this intensely competitive market, AlixPartners experts said on July 4.
“It will become a necessity for them to stay relevant in the market over the next five years,” Stephen Dyer, Asia Leader of the Automotive and Industrial Practice at AlixPartners, told reporters in Mandarin Chinese in Shanghai (our translation).
Overseas brands are facing marginalization in China and the consultancy expects their market share to shrink rapidly from 33% this year to only 24% by the end of this decade, with domestic rivals set to control the majority of the market. BYD chairman Wang Chuangfu has also anticipated a more aggressive outlook, saying last year that he expects foreign brands to only account for 10% of the Chinese market in three to five years, Reuters reported.
Chinese consumers previously had limited choices, but they are now able to choose from an array of tech-heavy offerings, and thus the key issue is whether global companies understand and are able to truly catch on to market trends, Dyer added. Their priorities include creating really agile software workflows, developing next-generation EVs based on a common electrical architecture, and the utilization of China’s tech ecosystems for car connectivity.
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The comments were made at a time when the world’s automotive industry is heading into a disruptive era, as trade and geopolitical tensions continue to weigh on the market and short-term volatility emerges in global EV demand. AlixPartners referred to the years from 2025 to 2029 as the “Age of Agility” in its annual global automotive outlook report, saying agility is no longer optional, but “what will separate the winners from the rest.”
International automakers face a more complex market landscape in China marked by the rise of local brands, growing pressure from price cuts, and enhanced regulatory oversight. Chinese brands are redefining global benchmarks with their speed-to-market mindset. It only takes 20 months on average for a Chinese electric vehicle startup to launch a model, which is twice as fast as global original equipment manufacturers (OEMs), according to AlixPartners’ latest analysis.
Their edge comes from a clear focus on speed over perfection. Dyer said a lesson learned from China’s “new operating model” is a higher risk appetite. Chinese brands start tooling for automotive and car parts molds even before they complete the testing and validation process for a new car. Meanwhile, many of them are decoupling hardware and software development, which significantly improves development efficiency.
Such measures reflect a clear trend that cars are becoming increasingly similar to a smartphone on wheels. The consultancy highlighted that immutable launch times are prioritized above all other considerations in the age of agility. “If you say you are more technologically capable than your competitors, you have to refresh your product lineups really fast,” Dyer added.
READ MORE: Chinese carmakers to become dominant globally despite tariffs – AlixPartners
