Chinese carmakers may take more than 10% of US market if let in: study

China-based automakers could potentially account for nearly 11 percent of the world's second-largest new car market by 2038 if barriers to their sales in the United States are eased, according to market research firm Mobility Global. This estimate is based on a scenario analysis conducted by the firm, which spun off from S&P Global in July.

Currently, vehicles manufactured by Chinese companies cannot be sold in the US due to high tariffs and trade restrictions. Mobility Global's associate director of US vehicle forecasting, Peter Nagle, stated that the probability of barriers being lifted over the next decade is low-to-moderate, assuming import restrictions remain in place.

He added that Chinese products are significantly more affordable compared to other car brands, making them an attractive option for US consumers. However, this would only be possible if restrictions blocking cars with Chinese infotainment, mapping, or other connected services are lifted. Some US lawmakers are pushing for even tougher rules to permanently ban Chinese cars.

Mobility Global predicts that Chinese manufacturers like BYD, Geely Automobile Holdings, and SAIC Motor Corp. could initially export to the US from plants in Mexico beginning in 2029, with a shift to new US factories in the following decade. This shift could potentially boost new car sales in the US by around 600,000 vehicles per year, providing momentum for a market that has remained largely stagnant in recent years.

Any gains made by Chinese brands in the US market would come at the expense of existing car manufacturers, potentially resulting in a loss of about one million vehicles annually. Most of the lost market share would likely be sustained by Asian brands such as Nissan, Hyundai, and Toyota.