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Overcapacity Across The Supply Chain Has Resulted In Intense Competition & Pullback Of Investments 2024 DEMAND, PRODUCTION, AND CAPACITY ACROSS SELECTED SECTORS IN CHINA
OVERCAPACITY POSES EXISTENTIAL CHALLENGE:
In China, EV and industrial subsidies have been scaled back, and new industry standards are aimed at culling low-quality capacity
This has led to a crowded market and fierce competition in several stages of the supply chain, with price wars being common and some companies producing despite no orders
In other industries - such as solar - this story eventually resulted in a wave of consolidation
In the rest of the world, capacity investments have overshot local demand and many are now being cancelled, cut down, or delayed
CHINESE MANUFACTURERS HAVE 3 STRATEGIC OPTIONS: 1. 2. 3.
Embrace cost competition domestically & cut prices to retain market share Focus on technical innovation and supply chain efficiencies to optimize the cost and value of products Expand overseas, where there is less competition, and an opportunity to maximize profits to offset shrinking margins back home
Source: Content & analysis provided courtesy of CRU Group (Distinguished Partner). For more information, visit https://www.crugroup.com. ‘Demand’ includes exports. There is a time lag from material and cell production to installation into end-use demand. Figures are rounded to the nearest 50. December 2024 data is partially estimated.
Extracted from the PDF; charts and images may read imperfectly.
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