Foreign Carmakers Lose More Ground in China as EV Powerhouses Erode the Luxury Segment

International luxury car brands lost further ground in China last month, the South China Morning Post reported, as affluent consumers continued to move away from expensive petrol-powered models made by Mercedes-Benz, Land Rover and their peers. The luxury tier had been the last part of the market that foreign automakers still held, in a country where domestic electric-vehicle (EV) makers already dominate the mass segment.

The shift is part of a broader Chinese industrial strategy. The country is pushing to make electric trucks at least 40 percent of new heavy-goods vehicle sales by 2030, the Post reported separately, a target that would put at least 1.6 million electric heavy vehicles on the road and further extend China's lead in electrified transport.

The Financial Times, examining what it called a contest of neo-mercantilists, argued that China's high degree of self-sufficiency reduces its vulnerability to economic coercion by others. A domestic auto industry that can supply its own market, and increasingly export the surplus, is one expression of that insulation.

For foreign manufacturers, the erosion of the premium segment removes a source of profit that had offset weakness elsewhere in China. The same competitiveness that captures the home market drives an export push, sending Chinese vehicles into Europe and the Global South and increasing the trade friction that tariffs on both sides are meant to address.