by New Realities of the Automotive Industry
The automotive industry has entered a new phase where old hierarchies no longer guarantee dominance. The days when automakers with a long history could ignore new competitors from China are gone.
Now, General Motors understands that it needs to move faster and think more sharply to keep up with Chinese electric vehicle giants. According to its president, this means creating new models at a speed that once seemed impossible.
The Difference in Development Pace
On average, a new model from a Chinese EV brand has a typical development cycle of 22 to 28 months, which is significantly faster than the 32-48 months for Western automakers. GM President Mark Reuss acknowledges that the speed of new competitors is something they must match.
I would say we can learn a lot in terms of speed. I don’t think copying each other and trying to push each other out of the market on price is necessarily a good thing.
Strategies of Chinese Manufacturers
Reuss noted that Chinese brands often use a single supplier base and can quickly implement innovations, which helps reduce development time. However, he acknowledged that these automakers may find it difficult to make money if they are not also selling batteries.
They study each other very carefully, then copy and launch into production, so the cycle is very fast because of that. Many companies appear and disappear, and it happens often. If you are not selling batteries, it is quite a difficult financial deal to make money there.
The Global Acceleration Race
GM is far from the only automaker that needs to accelerate development timelines. Last month, Audi stated it is going at “Chinese speed” with the development of the next-generation TT, aiming to launch it just 30 months after project approval.
Less than two weeks later, BMW raised the stakes, stating that even Chinese companies cannot match its momentum in developing Neue Klasse vehicles. The Bavarian company promised to release 40 new and updated models over the next two years, signaling once again that the global race for EV development speed is ongoing.
This transformation of the automotive industry indicates a fundamental shift in product development approaches. The speed of innovation now defines competitive advantages, and traditional car development methods require rethinking. The growing reliance on shared suppliers and standardized components may be the key to achieving the necessary speed, but at the same time raises questions about product individuality and long-term profitability.
