the CEO of xping just sent an email to all of his thousands of Staff telling them that in 2025 further price Wars would escalate we're looking at the greatest Price War battles in the history of the automotive industry we have never ever in human history seen it play out this way we have never seen automakers willing to sell millions of cars at a loss in order to gain market share and not bad cars but actually cars that are improving every few months this blood bath as xang C I referred to it is only going to get deeper more muddy and more bloody in 2025 but all of this is primarily at the expense of Western automakers who are unquestionably losing this battle more than 30,000 car dealerships in mainland China are facing a bleak year in 2025 with many turning from basically high-profit generators into corporate failures in 2 years under a debilitating price war and an e-commerce Onslaught more than half of the entire Industries participants failed to achieve their sales targets for 2024 the China Automobile Dealers Association said in an end of December report most of them are suffering huge losses or struggling with capital they cannot raise the funds they need the discount War among Chinese manufacturers involving petrol powered and electric cars resulted in us $24. 3 billion of losses from January to December in 2024 Chinese car dealerships lost more than $20 billion there were several bankruptcies as well margins in the industry are incredibly low but no one really seems to know the numbers I mean yeah China is clearly taking over the global automotive industry but it is at a price it is costing them huge huge sums of money the Chinese government of course is stimulating the automotive industry in China as does the American government in America and European governments in Europe but that has cost hundreds of billions of dollars more losses are coming here are the numbers behind what we're seeing here in China and what is projected to happen in 2025 hello my friends welcome to the channel I'm Sam Evans you're watching the electric Viking great to have you with us if you want to support the channel by becoming a YouTube member that would help me to continue creating more videos and try and get the word out there about what's really going on and how we can transform the global economy you know EVS are massively improving People's Health qualities air quality improvements have been enormous in China in particular I noticed that when I was there been there a few times recently and I I thinking to myself you know what the air quality here is significantly better than Melbourne significantly better than Sydney I feel like I'm not choking in fumes like I am in those cities and that's we know that that causes cancer that causes all kinds of illnesses so that's a big part of the reason the Chinese government have driven electrification but the other reason is they know it's the future of the automotive industry that said there are losses and casualties that are occurring I mean massive ones one Chinese carmaker lost an average of $48,000 per car Neo in 2024 $48,000 per car that is just crazy Chinese firms are suffering huge huge losses I'm not going to get into those numbers but let's have a look at the dealerships themselves 4,000 dealerships were shut down of a total of 30,000 dealerships 2,000 dealerships actually went bankrupt the year before so the number of dealerships going bankrupt doubled in 2024 versus 2023 remember this is not a shrinking Market the Carell the car market in China actually increased by 5% in 2024 there's a lot of YouTube channels that are telling you stuff about the Chinese car market saying it's in recession uh it's it's in D Straits I don't really care about that stuff what I care about is the facts the facts are that actually 5% more more cars were sold in 2024 than 2023 for around 30 million sales and that means that about 36 37% of all cars sold worldwide last year were sold in China so it's not like this is some you know zero some game that's getting worse it's getting worse for legac Auto makers so you would think that it wouldn't be so Cutthroat but because of these price Wars which is what Chinese firms do um where basically they eliminate all the small players and just the big ones are left standing in most Industries like solar for example because of this margins have been pushed so hard profit margins in China's automotive industry were squeezed even further in 2024 as Cutthroat competition continued to claim weak electric vehicle manufacturers industrywide margins for car manufacturers in the world's largest market averaged 4. 4% in the January through November period data released at December 27 by China's passenger car Association shows they averaged 5% in 2023 the year before that it was 7% the year before that it was over 10% as you can see Legacy automakers who used to make billions General Motors in particular Volkswagen in particular more than 50% of their profit used to come from China that's finished that is over now they're barely making any profit I mean General Motors obviously made a huge loss for three successive quarters they lost hundreds of millions in China they just wrote down their business to the tune of6 billion us as well in China massive losses being incurred by legac Auto but they're not the only ones now these profits low profits are being seen across the industry but they're also affecting suppliers average profit margins of 6.
1% of Downstream Industrial Enterprises showed that profit margins across all of China have been squeezed the automotive industry needs to effectively reduce costs and increase efficiency and increase the level of cost control said qu dongu the industry trade groups Secretary General so what are automakers doing well they're doing a few things they're trying to make cars much much faster they're using giant Giga presses that are even bigger than that are even bigger than Tesla's Giga presses they're using every technique they can think of Robotics to improve efficiency to make products at a lower price for at least a last two years China's car market and particularly its EV sector has been characterized by intense rivalries that have spawned price cuts and deep discounting in an attempt to lure buyers and also not just that I mean B's CEO said he intends to rid China of Legacy automakers and good on him why not ASB company has Consolidated its grip smaller players have gone out of business gu backed by bayu Inc and J automobile Holdings and human Horizons Group Inc known as Hi-Fi were among this year's casualties so was Mitsubishi Mitsubishi left China for good total industry Revenue in the first 11 months of the year Rose only 3% to $1. 3 trillion us while costs climbed by 4% to 8. 3 trillion yen or approximately 1 trillion us profits slipped to 4132 billion yen a year-on-year decrease of 7.
3% in the month of of November profits fell 35% and the margin of the automotive industry was even lower at 3. 3% so by the end of the year industry margins are meant to be healthy they're meant to be good for October November December which are the key three months of the year for the Chinese car market when sales rock it up but they went even lower margins were at an all-time record low so we've got companies new companies coming into the market got xiaomi we've got these new brands that you guys probably haven't really heard that of that much I haven't talked about them that much but new brands have entered the market in China and they are putting the squeeze on Neo a Chinese electric car company that competes with Tesla employs 11,000 people in research and development alone but sells only 8,000 cars per month well used to anyway it's selling more than that now up it's up to about 30,000 by the end of the year but on average it was only selling around 15,000 cars per month and it's making huge losses as a result Neo lost us 835 million from April through June just in that 3mon period or us $335,000 for every single car it sold but Neo and other companies in China's sprawling electric car sector have formidable government backing that allows them to withstand such losses and keep growing when Neo nearly ran out of cash in 2020 a local government immediately injected US1 billion for a 24% stake and a state control Bank led a group of other leaders to pump in another us$1. 6 billion over the last 6 years the US the Chinese government appears to have invested more than $240 billion into their electric automotive industry the push eventually created a market for 13.
1 million vehicles that accounted for 60% of EV ownership globally Beijing also pushed for Global sales of China's mvs that effort hasn't really worked in the United States as Washington has pretty much blocked China's electric cars but it certainly worked really well outside of China China is now the largest exporter of cars in the world it used to be in fifth place only a few years ago the South China Morning Post reported only yesterday that oblique 2025 awaits China's 30,000 car dealers as price War piles on us $24 billion in losses now despite a 4.
