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Multinational automakers operating in China with annual sales of 100,000 to 300,000 vehicles face a significantly elevated risk of market exit, with the probability estimated at 50%–80%, according to a report by the China EV100 Research Institute, this category is expected to include four to five companies, such as Dongfeng Peugeot Citroën (DPCA), Chery Jaguar Land Rover, smart, Changan Lincoln, Changan Mazda, and JMC Ford. In 2020, domestic brands held a market share of 36%, while foreign brands dominated with 64%. However, from January to October of this year, domestic brands expanded their share to 65%, as foreign brands declined sharply to 35%. Passenger Car Association data for November show that German brands accounted for 14% of retail sales, Japanese brands 11.7%, American brands 5.7%, and Korean brands just 0.9%. 

China would require an increase of USD6,500 in per capita GDP from 2024 to 2035, corresponding to an average annual GDP growth rate of about 3.7%, to reach USD 20,000—the threshold commonly associated with moderately developed economies, according to Ma Jiantang, former Party Secretary of the Development Research Center of the State Council. To achieve USD23,000, which represents the average per capita GDP level of 15 more-moderately developed countries, an increase of USD 9,500 would be necessary, implying an average annual growth rate of roughly 5% over the same period. Ma noted that China’s total population has recorded negative growth for three consecutive years, which helped raise China’s per capita GDP.

China has limited room to expand the consumption of physical goods, making services the main engine for future consumption growth, said Su Jian, a director at the National Economic Research Center. As the economy continues to develop, the share of service consumption in total household spending will inevitably increase, establishing a clear and enduring long-term trend, Su added. Luo Zhiheng, chief economist at Yuekai Securities, noted that in 2024 China’s household consumption rate stood about 28 percentage points below that of the U.S., with the gap largely concentrated in service consumption. He emphasised that demand for high-end healthcare, premium elderly care, cultural and tourism and domestic services remains far from fully released or adequately met. (Source: 21st Century Business Herald)