Chinese Car Companies Overtaking Western OEMs in Connectivity: ABI
Chinese automakers are retaking the domestic connected car market from foreign OEM competitors, helped by Chinese consumers’ appetite for higher-tech vehicles and “decisive government action” to nurture a domestic industry, reported ABI Research Tuesday. It estimates nearly half of all…
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new vehicles sold in China this year will have connectivity, and the penetration rate will increase to nearly 80% by 2025. Nearly 40 million cars on the road in China will have connectivity by year’s end, it said. Chinese automotive OEMs historically operated as manufacturing hubs for their foreign joint venture partners, but they became more “self-dependent” in recent years, said ABI. They're increasingly seeking ways to compete against their “incumbent Western counterparts” by offering high-end infotainment systems with smartphone-like interfaces in partnership with local internet giants, it said. With vehicle connectivity now a key selling point, Chinese carmakers are increasingly offering connected services subscriptions for longer free trial periods than in Western countries, sometimes even for the vehicle's lifetime, it said. The typical three-year trial period in the U.S. can last up to a decade in China, it said.