When I first went to Shenzhen in 2004 it was still being built. There was construction everywhere. Everything was new. Ten years earlier the town didn’t exist. Now, it’s arguably the most important city in the global consumer electronics industry.
Between 80% and 90% of all gadgets are made in this conglomeration of a town. And now it’s coming for the SA auto industry. Be afraid. Be very afraid.
By Shenzhen I don’t just mean the city itself, but the business model it represents. China is the most industrialised manufacturing country and is excellent at it. It’s no longer the knock-off capital (OK, it kind of is) and is as widely known for its innovation as its ability to churn out highly complex, circuitry-laden gadgets.
Data gathering and visualisation firm Statista estimates the global consumer electronics market generates about $978bn in revenue, of which the “telephony” (read: smartphones) category accounts for just more than half, or $504bn. That’s 6-billion gadgets, mostly made in Shenzhen.
Meanwhile, S&P Global forecast that global car sales will reach 89.6-million units this year — but that was before US President Donald Trump threw a spanner in the works with his irrational tariffs. Of that China is expected to buy 25-million cars, America 16.2-million and Europe 15-million. Give it a year and China will sell double that of its nearest competitors domestically.
Cars were once a complicated mechanically based engineering miracle of tens of thousands of moving parts. Now they’re gadgets. Really big, really expensive and still quite mechanically complicated, but gadgets nevertheless.
What is the primary interface for the next generation of electric vehicles (EVs)? A touchscreen in the middle of what was once called the dashboard.
Car sound used to be an aftermarket hobbyists haven. Now brands such as Sonos are in Audi and Volvo wrapped Harman Kardon speakers around the front windscreen of its EX30. To open the EX30’s cubbyhole — as it was called when I was a kid — you activate a touchscreen button.
Where Chinese car manufacturers once churned out cheap knock-offs — often glaringly obvious, such as the Landwind X7, a crude copy of the Range Rover Evoque — they are now leading the world.
Your next car, especially if it’s an EV, owes more to Steve Jobs than Henry Ford. And, much as he is no longer given as much weight as in the past, Elon Musk. Tesla set the early markers for this industry, but Musk’s self-destructive political shenanigans have done a lot to damage to Tesla as a brand, and analysts point out that its car models are old and the Cybertruck has been a disaster.
Where Chinese car manufacturers once churned out cheap knock-offs — often glaringly obvious, such as the Landwind X7, a crude copy of the Range Rover Evoque — they are now leading the world. Crucially, this is especially true in EVs and the small cars you need for a city in Europe, Asia or Africa.
Five of the 10 top-selling EV carmakers in 2024 were Chinese, led by BYD (founded in 1995 as a battery maker) with Tesla second (founded in 2003). Brands such as Geely (third; founded in 1989), Changan (sixth, 1862), Li Auto (ninth, 2015) and Chery (10th, 1997) are alongside iconic brands such as General Motors (fourth, 1908), Volkswagen (fifth, 1937), BMW (seventh, 1916) and Hyundai (eighth, 1967).
The age of the respective establishment and challenger firms says it all. Changan, amazingly, has been around for 150 years, though it produced military supplies initially and only started making cars in 1959. Its Lumin model was among the top 10 best-selling EVs in China last year.
Smartphone maker Xiaomi has expanded into smart home devices and EVs. When its YU7 SUV, a direct competitor to Tesla’s Model Y, went on sale it logged 200,000 reservations in three minutes.
The Chinese EV industry is also far ahead of any competitors in the race to solve the other great problem of the EV era: fast charging. In March BYD announced its “Super E-Platform”, which can give its latest cars a five-minute charge to drive 400km. The standard had been Tesla’s superchargers, which take 15 minutes to give its batteries 320km of range.
“Our goal is to make EV charging as fast as refuelling a petrol car,” said chair Wang Chuanfu, who aims to double BYD’s international sales this year, from 417,204 last year. It made 1.7-million EVs and 4-million cars in total.
A month after BYD’s announcement China’s CATL, which just happens to be the world’s biggest maker of EV batteries, showed off its own superfast-charging technology, promising 500km with a five minute charge.
“Auto Shanghai 2025 wasn’t just a car show,” the New York Times wrote in May of the only global car show that seems to matter anymore. “It was a warning to the West.”
The Chinese car industry has poached some of the best talent and biggest names from the big European and American brands, just as Japanese and Korean carmakers did before them. In terms of volume alone, the Chinese market is almost double that of the two next regions, Europe and America.
Meanwhile, SA’s car industry is staring down the double barrel of Trump’s tariffs and the EU’s looming carbon charges. SA vehicle exports to the US alone plunged nearly 82% in the first half of the year. Europe no longer wants gas-guzzling cars, and all the SA productions lines are geared for this old technology. The markets SA manufacturers have been supplying will be swallowed by Chinese makers, just as Shenzhen has devoured all the other centres for consumer electronics.
Besides many policy uncertainties, our local auto industry is also hobbled by mindless taxes — including 28% import tariffs for electric cars. South Africans have to pay nearly 30% more for an EV to protect a car industry that has just lost more than 80% of its US export market. Talk about shooting yourself in the foot.
Meanwhile, BYD, though it has international aspirations, is mostly focused on the Chinese domestic market, where local brands are no longer seen as inferior to Western ones. BYD now sells cars in 80 countries and bought its own cargo ships to have tighter control of its logistics. That’s another strategic advantage none of the European or US brands have.
And where is BYD based? Shenzhen.
• Shapshak is editor-in-chief of Stuff.co.za.
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