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China became the world's biggest auto exporter in the first quarter, and this has left Ford Motor Co. (NYSE:F) CEO Jim Farley truly impressed.
What Happened: Terming China's ascent to the top of the auto export market as "monumental," Farley said the country exported more than a million units, increasingly to Europe. The auto executive noted that previously the export market was dominated by the Germans and the Japanese.
About 50-60% of the Chinese market will likely be accounted for by electric vehicles, Farley said at the Bernstein 39th Annual Strategic Decisions Conference. “They have a different digital ecosystem as you know, so that will require some transition for them,” he said.
Farley predicted that companies like SAIC Motor Corp, Geely Automobile Holdings Ltd (OTC:GELYF) (OTC:GELYY) and BYD Company Limited (OTC:BYDDY) (OTC:BYDDF) will likely become global players. He pointed out that their local market had sales of 25 million units, which was a quarter of all the vehicle sales. This made it large enough for them to focus their efforts locally.
The EV pricing war has forced them to look elsewhere, where their pricing power is higher, Farley added.
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New World Order: The Ford CEO said he sees a lot of shifting of winners and losers within the industry, even in the short term. Some more mature OEMs will likely shrink and others will expand dramatically, he said.
He singled out BYD as one which offers a lot of promise. “They have to sort out their brand and their distribution overseas and become a global player,” he said.
Farley cautioned that it wasn't going to be easy. “But if you take the half-life of what happened in the Chinese, the Japanese, where I worked for 25 years, and then the half-life of the Koreans who were doing amazing jobs now on EV and digital products, you take that half-life and apply it to the Chinese OEMs that are now exporting the largest number of vehicles in the world now, I think, you can clearly see it’s a bit of a new world order,” he said.
Read Next: Ford CEO Brushes Off Competition From Tesla, GM, Toyota: ‘Chinese Are Going To Be The Powerhouse’
Photo: Courtesy of media.ford.com and Shutterstock
