Chinese cars are coming to the US market, and almost every American executive knows it.
A survey by Kerrigan Advisors reveals that 76 percent of US automaker executives anticipate Chinese cars will eventually be sold in the US market.
70 percent also expressed concern about the financial implications of China’s growing dominance in the global automotive sector.
With Chinese cars already taking other markets by storm, it seems inevitable that the same will happen in the US.
China now accounts for 40 percent of global automotive production capacity, compared to the US’s 10 percent share.
This shift is attributed to China’s strategic investments in EV technology and its manufacturing capabilities.
For example, BYD shocked the world when they announced a new EV that can be charged in only five minutes.
Companies like BYD are leading the charge, with plans to sell half their vehicles outside China by 2030.
You can see their progress in countries like the UK, where Tesla has been dethroned as the best-selling EV maker by two new Chinese brands.
Despite China’s advancements, entering the US market won’t be easy.
Trade restrictions, such as tariffs on Chinese EVs, and potential customer reluctance pose significant hurdles.
After all, it can be difficult to persuade US citizens to ditch their all-American Camaros.
However, the demand for affordable and efficient EVs may eventually drive acceptance among US consumers.
With cheap Chinese EVs that can cost just $1,000, it’s easy to see the appeal for such vehicles.
The consensus among US automotive executives is clear: like it or not, Chinese cars are going to enter the US market.
While challenges exist, it seems like the introduction of Chinese automakers into the US market is not a matter of ‘if’, but ‘when’.
Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of more than 290 dealerships generating more than $9 billion in client proceeds, including two of the largest transactions in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group and Leith Automotive to Holman. The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, Kerrigan Advisors is the only firm in auto retail exclusively dedicated to sell-side advisory, providing its clients the assurance of a conflict-free approach.
Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, the industry authority on dealership buy/sell market trends and valuations and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases The Kerrigan Index™ comprised of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2024 Kerrigan Dealer Survey, click here. To read the 2024 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.
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