Like most industries in 2024, technological advances, shifting consumer preferences, and regulatory changes are transforming the global automotive industry. Frost & Sullivan’s analysis shows that Chinese Tier 1 suppliers have emerged as pivotal players in this dynamic environment, leveraging their technological capabilities and innovative prowess to capture significant market share across various automotive areas.
In this analysis, we delve into the strategic insights of leading Chinese Tier 1 suppliers, providing a clear understanding of their competitive strategies, growth trajectories, and the external factors shaping their global expansion. The report provides insights into the core competencies and technological strengths that distinguish Chinese suppliers internationally through detailed profiling and comparative analysis.
Applying the Ansoff product matrix offers a structured framework to evaluate the growth strategies of Chinese suppliers. At the same time, examining business models provides insights into their strategic approaches and competitive positioning. Furthermore, the report addresses the political and economic landscape, highlighting the challenges and opportunities that influence the global operations of Chinese Tier 1 suppliers.
In an era marked by geopolitical tensions and economic uncertainties, this report serves as a vital resource for stakeholders seeking to navigate the complexities of the global automotive industry. By understanding the strategies and capabilities of Chinese Tier 1 suppliers, industry participants can formulate informed methods to thrive in the competitive global landscape.
Author: Thanigesh Arumugam Parthasarathi
The Impact of the Top 3 Strategic Imperatives on the Chinese Tier 1 Automotive Suppliers Industry
Transformative Megatrends
- Why:
- The global shift toward electric vehicles (EVs) is creating massive opportunities. China, a leader in new energy vehicle (NEV) production, positions its Tier 1 suppliers to cater to this growing demand.
- Connected cars rely on robust software and hardware integration. With their expertise in internet technologies, companies like Tencent and Alibaba can partner with Chinese Tier 1 suppliers to create a competitive edge.
- Frost Perspective:
- Chinese companies will likely develop next-generation solid-state batteries that offer longer ranges and faster charging times in the next 3 years, potentially capturing a significant share of the premium EV battery market.
- We expect Chinese tech giants to partner with European and North American carmakers in the next few years to become crucial suppliers for their next-generation connected car services.
Geopolitical Chaos
- Why:
- Rising trade tensions between China and other major economies can disrupt supply chains and limit market access for Chinese Tier 1 suppliers.
- Access to critical raw materials, such as lithium for batteries, can be affected by geopolitical instability, impacting production costs and capabilities.
- Frost Perspective:
- Frost & Sullivan projects that the focus of Chinese EV component suppliers for the next 3 years will be identifying markets with favorable trade policies, such as Mexico and Brazil, and establishing joint ventures (JVs) or partnerships with local manufacturers.
- Suppliers will need to develop geographically distributed supply chain models by 2023 to minimize disruptions caused by trade tensions and ensure smooth delivery to global carmakers.
Industry Convergence
- Why:
- By merging their technologies with non-traditional partners, Chinese Tier 1 suppliers can access new markets; for example, BAIC Group’s partnership with Huawei merges Huawei's expertise in 5G and artificial intelligence (AI) with BAIC's automotive experience.
- Convergence also allows Tier 1 suppliers to offer holistic solutions; for instance, Aptiv is partnering with Xiaomi on in-vehicle infotainment (IVI) systems.
- Frost Perspective:
- For the next 3 to 5 years, Chinese Tier 1 suppliers will likely create a wave of innovative products and services from converged industries, such as vehicle-to-everything (V2X) solutions and personalized mobility subscriptions.
- Converged solutions will generate vast amounts of data, requiring robust data management and security protocols with the ecosystem.
Scope of Analysis
In this analysis, Frost & Sullivan identifies and profiles leading Chinese Tier 1 suppliers across 4 segments: EV components, connected car components, autonomous vehicle-related components, and smart interior components.
We also explore the core competencies, technological capabilities, and specialization of Chinese Tier 1 suppliers in each segment.
In addition, the analysis provides a comparative analysis of the technological prowess, innovation capabilities, and R&D investments of major Chinese Tier 1 suppliers.
Frost & Sullivan applies the Ansoff product matrix to assess the growth strategies of Chinese Tier 1 suppliers. This enables the evaluation of market penetration and development, product development, and diversification strategies within the global automotive components market.
The study offers an in-depth analysis of various business models adopted by Chinese Tier 1 suppliers, such as the OEM supplier model, technology provider model, and integrated solutions provider model. This allows the comparison of strategic approaches in terms of scalability, sustainability, and competitive advantage.
We also examine political factors, including trade policies, regulatory frameworks, and geopolitical tensions affecting the global expansion strategies of Chinese Tier 1 suppliers. This includes assessing economic factors such as demand shifts, economic growth rates, and currency fluctuations.
| Scope | |
| Geographic Coverage | Global |
| Study Period | 2023–2030 |
| Base Year | 2023 |
| Monetary Unit | US Dollars |
Segmentation
Chinese Tier 1 Automotive Suppliers
- EV Components Includes Tier 1 suppliers of battery packs (different types like lithium-ion, sodium-ion, solid-state batteries), battery modules, electric drive motors, battery management systems (BMS), and direct current (DC)-DC converters.
- Connected Vehicle Connected vehicle hardware and software supplies include V2X communication modules, 5G chips, telematics units, and connected vehicle software platforms; all vehicle communication module suppliers that supply directly to automotive OEMs.
- Autonomous Vehicle Includes suppliers that supply directly to automotive OEMs for autonomous vehicles, such as light detection and ranging (LiDAR), radar sensors, advanced driver-assistance systems (ADAS), camera systems, autonomous drive software, and lane assist systems.
- Smart Interiors Includes companies that supply futuristic interior products (e.g., intelligent cockpit systems/modules, smart navigation systems, navigation maps, heads-up display [HUD] units, wireless chargers, voice search systems) directly to automotive OEMs.
Competitive Environment
| Topic | Details |
|---|---|
| Number of Competitors | 50 to 70 with revenue greater than $1.0 million |
| Competitive Factors | Cost, performance, localization, manufacturing innovation, manufacturing downtime, raw material processing strength, supply chain routing |
| Key End-user Industry Verticals | Automotive |
| Leading Competitors | CATL, Huawei, Huizhou Desay SV, Baidu |
| Revenue Share of Top 5 Competitors (2023) | 65.0%, 2023 |
| Other Notable Competitors | Neusoft, Horizon Robotics, FinDreams |
| Distribution Structure | OEMs, direct sales to automotive OEMs, eCommerce sales |
| Notable Acquisitions and Mergers | Huawei entered the automotive business by acquiring Wenjie in 2023 |
Key Competitors
EV Components
- CATL
- BYD
- CALB
- NPP Power Co., Ltd.
- Farasis Energy
- Shenzhen Eastar Battery
- Microvast Power Systems Co., Ltd
- Entech International Inc
- Gotion High-Tech
- Harbin Coslight Power Co., Ltd.
Connected Vehicle
- Neusoft Corporation
- Dias Automotive Electronic Systems Co., Ltd.
- BYD Electronic (International) Co., Ltd.
- Beijing Jingwei HiRain Technologies Co., Ltd.
- Ningbo Joynext Technology Co., Ltd.
- Baidu Online Network Technology (Beijing) Co., Ltd.
Autonomous Vehicle
- Shenzhen Cheng-Tech Co., Ltd.
- RoboSense Technology Co., Ltd.
- Hesai Technology Co., Ltd.
- Huawei Technologies Co., Ltd.
- Ningbo Joyson Electronic Corp.
- ZongMu Technology (Shanghai) Co., Ltd.
- Foryou Corporation
- Beijing Horizon Robotics Technology R&D Co., Ltd.
- Huizhou Desay SV Automotive Co., Ltd.
Smart Interiors
- Yanfeng Automotive Trim Systems (Yantai) Co., Ltd.
- AlSpeech Co., Ltd.
- Baidu Online Network Technology (Beijing) Co., Ltd.
- iFLYTEK Co., Ltd.
- Foryou Corporation
- Huawei Technologies Co., Ltd.
- Neusoft Corporation
- AutoNavi Software Co., Ltd.
- Baidu Online Network Technology (Beijing) Co., Ltd.
- Neusoft Corporation
- Huizhou Desay SV Automotive Co., Ltd.
Why is it Increasingly Difficult to Grow?
The Strategic Imperative 8™
The Impact of the Top 3 Strategic Imperatives on the Chinese Tier 1 Automotive Suppliers Industry
Scope of Analysis
Segmentation
Distribution Channels
Competitive Environment
Key Competitors
Chinese Tier 1 Automotive Suppliers: Global Presence
Chinese Suppliers in the Global EV Battery Production Race
Benchmarking Chinese Tier 1 Supplier OEMs in Connected and Autonomous Vehicle Components
Business Capabilities of Major Chinese Tier 1 Suppliers
Growth Potential of Suppliers and Components by Term
Growth Drivers
Growth Restraints
Key Takeaways
Component Suppliers Segmentation
Notable Stats
Partnerships with Global Automakers
Recent Market Events
Chinese Tech Giants in Automotive Component/Software Supply
Chinese Government Policies and Incentives Supporting the Production and Exports of Tier 1 Suppliers
Growth Factors for Chinese Tier 1 Suppliers in the Global Market
Overview
Global Presence
Dominance in Lithium-ion Battery Production
Presence in Major Electrification Components Supply
Presence in Major EV Components Supply
Benchmarking Leading EV Components Suppliers
CATL Case Study
BYD: Company Portfolio
BYD: Go-to-market Strategy
Growth Potential
Overview
V2X Modules
5G/4G Chips and Modules
Telematics Units
ADAS Components
Global Players’ Partnerships with Chinese Tier 1 Connected Car Suppliers
Baidu: Core Capabilities
Baidu: Connected Car Portfolio
Baidu: Autonomous Tech Supplier
Huawei: Core Capabilities
Huawei: Connected Car Solutions
Alibaba: Connected Car Solutions
Growth Potential
Overview
Supply Ecosystem
Technology and Innovation landscape
Intelligent Cockpit Module Market: Chinese Tier 1 Supplier Perspective
Car Navigation Systems
Neusoft Profile
Huizhou Desay SV Automotive
Growth Potential
Possible Business Model Approaches Across Segments
Challenges for Global Expansion
Supply Chain Strength
Future Product Market Matrix: A Frost & Sullivan Take
Growth Opportunity 1: Growth of New Energy Vehicles in the Global Market
Growth Opportunity 1: Growth of New Energy Vehicles in the Global Market (continued)
Growth Opportunity 2: Chinese Tech Companies’ Entry into the Automotive Industry
Growth Opportunity 2: Chinese Tech Companies’ Entry into the Automotive Industry (continued)
Growth Opportunity 3: Collaborations in Connected and Autonomous Vehicle-related Components
Growth Opportunity 3: Collaborations in Connected and Autonomous Vehicle-related Components (continued)
Best Practice Recognition
Frost Radar
Benefits and Impacts of Growth Opportunities
Next Steps
Take the Next Step
List of Exhibits
Legal Disclaimer
List of Figures- Chinese Tier 1 Automotive Suppliers: Distribution Channel Analysis, Global, 2023
- Chinese Tier 1 Automotive Suppliers: Growth Drivers, Global, 2024–2030
- Chinese Tier 1 Automotive Suppliers: Growth Restraints, Global, 2024–2030
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| Deliverable Type | Market Research |
|---|---|
| Author | Thanigesh Arumugam Parthasarathi |
| Industries | Automotive |
| No Index | No |
| Is Prebook | No |
| Keyword 1 | Chinese Tier 1 Automotive Suppliers |
| Keyword 2 | Global Automotive Industry Trends |
| Keyword 3 | Automotive Market |
| List of Charts and Figures | Chinese Tier 1 Automotive Suppliers: Distribution Channel Analysis, Global, 2023~ Chinese Tier 1 Automotive Suppliers: Growth Drivers, Global, 2024–2030~ Chinese Tier 1 Automotive Suppliers: Growth Restraints, Global, 2024–2030~ |
| Podcast | No |
| Predecessor | PF05-01-00-00-00 |
| WIP Number | PFLB-01-00-00-00 |
Chinese Tier 1 Automotive Suppliers Market, Global, 2024 2030
Connected, Autonomous, and Electric Vehicles are Driving Transformational Growth and Globalization of Suppliers by 2030
30-Jul-2024
Global
Market Research