China's auto market has seen significant shifts over the past 30 years. Once dominant joint venture brands are now on the defensive against independent brands.

In October this year, the retail penetration rate of new energy passenger vehicles in China reached 52.9%. Chinese independent brands have gained more say in this field. Currently, it has become the norm for independent brands to exceed a 60% market share, and the 7:3 ratio between independent and joint venture brands is about to be realized.

The price war that has lingered for nearly a year has made it difficult for most joint venture brands to form a competitive advantage in direct confrontations of technology and products. Exchanging market share through "price wars" or even deeper joint ventures and collaborations has become the norm in China's auto market.

Foreign brands that once dominated China's auto market are now adjusting to a new environment after a period of discomfort. This year's Guangzhou Auto Show showcased joint venture brands' new thinking and desire for change in the current Chinese market.

American cars returning to value

Both traditional fuel vehicles and joint venture brands are pulling out all the stops to survive in this fierce market competition, giving birth to the "one-price" strategy.

SAIC-GM's one-price model has had an immediate impact on boosting end sales. The model matrix consisting of the Buick LaCrosse at 159,900 yuan, the Envision Plus at 169,900 yuan, and the Cadillac XT5 at 265,900 yuan has been crucial for SAIC-GM to quickly stabilize end sales.

In October, SAIC-GM's end sales reached 58,240 units, a 6.1% month-on-month increase. Although this is far from its peak sales, considering the fierce competition in the domestic auto market, achieving such results is already remarkable.

Who says joint venture automakers are no good? Who says traditional fuel vehicles are no good? SAIC-GM has proven that with the right price, even joint venture brands and even traditional fuel vehicles can sell well. After all, there are no unsellable products in this world, only unsellable prices.

The one-price model can be seen as a pricing reshaping within the GM system and a return to value for joint venture brands. Especially under the siege of new energy vehicles from Chinese automakers, a return to value is imperative for the entire joint venture brand camp.

Ford, a fellow American automaker, is also focusing on a return to value, but not through price. Instead, it is putting effort into its products. At the Ford booth, more personalized and refreshing products took center stage.

Ford has a rich history in SUVs, pickup trucks, and high-performance sports cars. At the Guangzhou Auto Show, Ford showcased multiple iconic rugged and performance models, including the Ford Mustang Convertible Sports Edition, the off-road pickup Ford F-150 Raptor, and the convertible off-roader Ford Bronco. By returning vehicles to their original value and focusing on personalization and brand tone, this is what Ford will continue to do this year and beyond.

Frank Song, Global Vice President of Ford Motor Company, President and CEO of Ford China, previously stated that Ford's sales performance from January to September this year was better than last year. Being able to perform well in such a competitive environment is mainly due to Ford's strong brand tone.

Deeply tied to China's Japanese cars

Japanese cars, once dominant in the Chinese market, have struggled with the intensified competition in recent years.

Nissan, Honda, and Toyota have been slow in their transition to electrification, especially in the electric vehicle business, making them increasingly feel the pressure.

Therefore, at this year's Guangzhou Auto Show, Japanese automakers are also vigorously demonstrating their commitment to the Chinese market. From "Lingsi" to "Boxi" to "Ye," Dongfeng Nissan also showcased the pure electric Epoch model. It can be said that Japanese joint venture automakers have launched new energy brands with new products for the Chinese market, aligning their product capabilities and speed with independent brands. Although there may be a gap in actual product capabilities, it represents a new change.

In addition to the three major mainstream Japanese joint venture brands mentioned above, Changan Mazda has also brought a new energy vehicle model tailored for the Chinese market, jointly developed by Changan and Mazda. The EZ-6, which is highly anticipated by both Changan Mazda and its shareholders, will be followed by more new energy products suitable for the current market, demonstrating Mazda's determination to continue to root itself in the Chinese market.

At the same time, cross-border cooperation has become the preferred choice for Japanese joint venture automakers to tap into intelligence. On the eve of the auto show, Dongfeng Nissan and Huawei signed a strategic cooperation agreement to jointly develop intelligent cockpits, making it the first joint venture company to do so. According to the cooperation agreement, Nissan will introduce Huawei's HarmonyOS to provide a powerful intelligent cockpit solution for its new generation of smart cars.

It is clear that facing the aggressive independent brands, Japanese automakers are no longer hesitant and have decisively partnered with technology giants like Huawei. It is believed that other Japanese brands will follow suit in the future, aiming to catch up with the mainstream level of China's new energy vehicles after missing the best window period, so as to remain competitive.

Increasingly localized Volkswagen

For many years, Volkswagen has maintained the top sales and market share in the Chinese market, which is also Volkswagen's most important market globally, accounting for about 40% of its global market share at one point. From 2019 to 2023, Volkswagen's annual sales in China have shown a declining trend. Compared to its peak period, China's contribution to Volkswagen has decreased by 10 percentage points, and BYD has taken over the top spot in the market.

Therefore, Volkswagen, which relies heavily on the Chinese market, has a stronger desire to survive. At the auto show, Volkswagen, Audi, and Porsche showcased multiple pure electric vehicle models.

Meanwhile, Volkswagen and XPeng jointly launched the next-generation electronic and electrical architecture in China, the CEA architecture, in April this year. It is now available for Chinese users to experience in real machines. It is reported that the CEA architecture will be mass-produced by 2025, and related models will be launched as scheduled in 2026.

Stefan Mecha, CEO of Volkswagen Passenger Cars China, said that by 2026, Volkswagen's new technologies in the Chinese market will gradually complete testing and shaping. By then, Volkswagen will also launch multiple key products with its three joint ventures.

On April 11 this year, Volkswagen China announced that it would invest 2.5 billion euros to further expand its production and innovation center in Hefei to strengthen local research and development. At the same time, the Volkswagen Group will produce two Volkswagen brand models jointly developed with XPeng in Hefei. Undoubtedly, Volkswagen has now separated the Chinese market and is becoming more localized in its strategy to withstand the new energy and price war offensive from independent brands like BYD.

In response to the fierce offensive of independent brands, we can see that major joint venture brands are also displaying their prowess. American brands dare to sacrifice profits in the short term to maintain market share; Japanese brands choose to define the cars sold in China according to Chinese consumer demand; German brands represented by Volkswagen are strengthening local research and development in China and fully utilizing China's resources in electrification and intelligence; and these joint venture brands are also adhering to the "dual-track" strategy of oil and electricity.