Explanation of Why Chinese Cars Are Cheaper Than Japanese and European Ones

BEIJING, KOMPAS.com - In addition to aggressive brand expansion, one aspect that often catches consumers’ attention is the relatively affordable price of cars from China compared to Japanese or European brands.

Andrew Nasuri, Director of Indomobil Group, stated that the main factors influencing these prices are production scale and component supply chain efficiency.

Because many producers in China use components from the same suppliers, even across brands, this creates substantial production cost efficiencies.

This differs from Japanese and European brands, which typically only share components if they are within the same group or under the same umbrella.

“(For example) batteries, CATL, all brands use CATL. That is an extraordinary cost efficiency,” he said.

Additionally, the system of sharing components among producers is a key factor in the low production costs of vehicles in China.

With very large production scales and an integrated industrial ecosystem, Chinese automotive producers can reduce costs without sacrificing quality.

This is what makes the selling price of vehicles more competitive in the global market, including Indonesia.