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Apr 7, 12:07
Price wars and vertical integration reshape China's auto industry
China's auto market is undergoing a structural shift in the first quarter of 2026. While joint-venture giants such as Volkswagen and Toyota have posted strong sales, a deeper divergence is emerging. Domestic manufacturers, adopting a development model closer to consumer electronics and emphasizing vertical integration, are charting a path fundamentally different from the traditional, foreign-led automotive system.
In the era of software-defined vehicles (SDVs), the automotive industry faces a fundamental tension: while a car's mechanical structure can last 15 years or more, its digital computing and communication technologies evolve on a 3-to-5-year cycle.
LG Energy Solution has introduced a new "double stack" manufacturing process for prismatic batteries to be supplied to Tesla, according to South Korea's The Elec, as the battery maker expands US production for grid-scale energy storage.
Taiwan's auto market showed strong momentum in March 2026, with total vehicle registrations reaching 39,318 units — a sharp 78.4% jump from February — signaling a broad post-Lunar New Year rebound in consumer demand. That explosive monthly growth, alongside first-quarter 2026 totals, highlights significant structural shifts underway.
The French government will provide about EUR1.5 billion (US$1.7 billion) in subsidies to support Taiwanese startup ProLogium Technology's new factory construction in France. According to Nikkei, this move signals France's accelerated efforts to attract electric vehicle (EV) battery manufacturers and marks a shift from its previous "self-reliance" industrial policy focused on EU-based companies.
Chinese automakers have pushed aggressively into overseas markets in recent years, leveraging competitive pricing and tech-forward features to win the attention of dealers and retailers worldwide. Mexico has emerged as a key beachhead for this outward expansion. Yet new market research suggests that local dealers' experiences with Chinese brands have been sharply divided.
Japan's auto parts supplier Denso on March 31 unveiled a mid-term business plan through March 2031, targeting revenue of JPY8 trillion (approx. US$54 billion) and a return on equity (ROE) of 11%. The strategy underscores a shift toward semiconductors as a core growth driver, alongside vehicle electrification and intelligent systems, signaling ambitions beyond its traditional role as an automotive supplier.
Benefiting from the AI infrastructure boom, Taiwan-based soft magnetic ferrite core and silicon carbide (SiC) powder supplier Acme Electronics Corporation (ACME) expects growth in its soft magnetic core business in 2026, as AI servers drive demand for high-performance passive components and SiC-based power devices.

MG, the European arm of China's SAIC Motor Group, confirmed that its upcoming MG4 Urban will feature semi-solid battery technology to address the range loss issues of lithium iron phosphate (LFP) batteries in cold climates. LFP batteries are known to lose significant performance in high-latitude, low-temperature environments, drastically reducing driving range. By adopting semi-solid batteries, MG aims to limit range loss even in extreme conditions from -20°C to -40°C, offering European drivers more consistent EV performance.

Japan Display Inc. (JDI) signed a definitive agreement to sell its Tottori Fab to Yahata Touei Estate K.K., with handover scheduled for September 30, 2026; JDI said the transaction follows its March 2025 production halt and forms part of structural reforms that could influence global automotive display supply and the Japanese manufacturing consolidation industry.

Huawei reported 2025 revenue of CNY880.9 billion, up 2.2% year-over-year, its second-highest on record, with net profit rising 8.63% to CNY68 billion (approx. US$9.87 billion). Growth slowed sharply from 22.4% in 2024, leaving revenue just below its 2020 peak of CNY891.4 billion and raising the bar for further expansion, analysts cited by Chinastarmarket.cn said.

A year ago, the Japanese automotive world watched Honda, the financially robust "second brother," attempt to assert dominance over its smaller sibling Nissan. The high-stakes negotiations, marked by a glaring imbalance of power, ended abruptly and bitterly.