How China's Carmakers Beat Global Rivals

Chinese automakers have been driving rapid growth by slashing vehicle development time

- Reuters

SHENZHEN, CHINA In October 2023, Chinese automaker Chery ordered engineers and suppliers to travel on short notice to proving grounds in Zhaoyuan, Shandong Province.

Over a weekend, they planned an overhaul of the suspension and steering on the Chinese version of Chery's Omoda 5 SUV for Europe, a key market in its global expansion. The problem: The car had been designed for China's smooth streets and slower speeds. Now, it had to withstand Europe's winding, bumpy roads.

Just six weeks later, Chery started shipping the European-spec Omoda 5 to dealers, complete with new steering, traction control, brakes, vibration dampers, and tires.

"You can forget doing something that fast with a European automaker," said Riccardo Tonelli, Chery's senior vehicle-dynamics expert, who led the overhaul. "It's impossible."

Tonelli, who previously worked at an Italian carmaker and a Korean tire maker, estimated Western manufacturers would take well over a year to push similar improvements through their comparatively bureaucratic organizations.

Chery's Omoda makeover exemplifies the disruptive speed and flexibility of Chinese automakers, which have seized control of their home market, the world's largest, from once-dominant foreign competitors. Now, China's rising auto giants are racing to expand globally, with Chery as the leading exporter. Electric vehicle (EV) giant BYD, China's largest automaker, poses a bigger long-term competitive threat, industry executives say.

China's emerging automotive dominance owes largely to a singular manufacturing achievement—slashing vehicle development time by more than half, to as little as 18 months for an all-new or redesigned model. The average age of a Chinese-brand electric or plug-in hybrid model on sale domestically is 1.6 years, versus 5.4 years for foreign brands, consultancy AlixPartners found.