Chinese automakers are making unprecedented gains in global markets, capturing significant market share across multiple regions while still absent from the United States. Michael Dunne, CEO of Dunne Insights and host of the Driving with Dunne podcast, joins us on the latest episode of Inside Automotive to discuss how dealers should act now to understand these brands before they inevitably enter the American market.
“If the Chinese are going to come in, they are probably going to have to manufacture here in the United States.”
According to Dunne, in just five years, Chinese automakers have captured 20% of the Australian market, 30% in Israel, 10% in the United Kingdom, and 5% across Europe. Their lineups span from low-cost EVs to high-end luxury SUVs, combining advanced technology with competitive pricing.
The rapid rise is already putting pressure on established manufacturers. Volkswagen, Honda, Toyota, and GM are losing sales in multiple regions, with VW considering European plant closures. Premium brands like Mercedes, BMW, and Audi are also losing ground in China to domestic EV markets.
Tariffs keep Chinese automakers out… for now
U.S. tariffs on Chinese imports, ranging from 125% to 150%, are effectively keeping these vehicles off American roads. Both political parties currently support these restrictions, but future policy changes, like those involving U.S.-based manufacturing or joint ventures, could open the market.
Further, Dunne notes that Chinese automakers favor a franchise dealer model when entering new regions, viewing dealers as strategic allies for sales, community engagement, and political support. This approach could create partnership opportunities for U.S. retailers if Chinese brands enter the market.
Dunne highlights Vietnam’s VinFast, which has become a predominant force in its home market, overtaking Toyota and Hyundai to claim the top three best-selling models. While EV adoption in Vietnam surged from 2% to nearly 50% in five years, the EV maker initially targeted the U.S. with a direct-to-consumer model but has since shifted to a network of about 50 dealers, while focusing on consolidating its position in Southeast Asia.
Quality and reliability still to be proven
While Chinese brands benefit from decades of domestic manufacturing partnerships with global automakers, giving them access to world-class suppliers, their long-term reliability remains untested due to the speed of their growth.
The expansion of Chinese automakers in overseas markets, combined with their dealer-friendly approach, makes it critical for U.S. retailers to understand these brands’ strengths, weaknesses, and market strategies well before they arrive in America.
