Experts explained China's ability to produce affordable cars

Chinese automakers are able to make their cars available on the home market through strong government support, large-scale production, an efficient localized supply chain, and an engineering culture tailored to minimize costs. Experts of the Auto portal told about it on November 26.<url>, reports Rossiyskaya Gazeta.

Thus, the Chinese government, as part of the development of the automotive industry, reduces the financial burden on both companies and end users, provides subsidies and preferential loans, and finances the construction of large factories and charging stations. High import duties and requirements for foreign companies to establish joint ventures when entering the market protected local producers, which gave them time to grow and gain experience.

At the same time, the Chinese car market is the largest in the world, and local factories produce millions of cars a year, as a result of which the costs of research and development, as well as the maintenance of factories, are distributed to each unit of production.

"Imagine that you bake one pie or a thousand — the cost of one piece in a large volume will be much lower. It's the same with cars. This dramatically reduces their cost," the experts noted.

In addition, China has developed a self-sufficient ecosystem for car production, in which almost all components are produced domestically or from neighbors, which eliminates expensive imports and reduces dependence on exchange rates. At the same time, some companies, such as BYD, control the entire chain from the extraction of raw materials to the production of some parts.

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The day before, the head of AVTOVAZ, Maxim Sokolov, announced an increase in investment in production. The company's investment program in 2025 will amount to 45 billion rubles, and a similar amount is planned for next year. The head of the car company said that the market decline is due to macro-financial conditions, the Central Bank's interest rate, tighter lending conditions, as well as "severe dumping by the Chinese car industry."

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