Beyond borders: How emerging markets are driving automotive change

The automotive world has entered a new era and the old rules no longer apply. What was once a European and North American stronghold is now a fiercely competitive global arena, one where innovation is coming from all corners of the world, especially emerging markets.

Since 2023 a seismic shift has been underway. Whilst Chinese original equipment manufacturers (OEMs) are among the most prominent disruptors, they’re part of a wider story unfolding across APAC, LATAM and MENA regions once considered peripheral to the global auto narrative.

Emerging players are taking advantage of the rapid industrialization, government incentives and rising consumer demand for cleaner, smarter mobility. These markets are helping reshape global supply chains, accelerate innovation cycles and challenge long-held assumptions in vehicle design, pricing and most importantly, the speed of production.

Reshaping the road ahead

Today’s competitive advantage in the auto industry comes less from horsepower and more from computing power. Software-defined vehicles (SDVs), connected ecosystems, EV platforms and monetization models are now at the center of every OEM’s roadmap. Whether it’s through embedded navigation, over-the-air updates or data-enabled features, the automotive vehicle is quickly becoming a digital device on wheels.

OEMs across the globe are racing to shorten their go-to-market timelines. What once took five to seven years from concept to launch now needs to happen in 24 to 36 months. That pressure is leading to leaner supply chains, tighter integration between hardware and software and closer partnerships between automakers and tech firms.

A new kind of competition

Chinese automakers began venturing into global markets in the early 2000s, with brands like Chery and Great Wall Motors exporting to the Middle East and Eastern Europe. However, early strides were limited by quality concerns and low brand recognition.

Momentum picked up in the 2010s and accelerated in the 2020s, largely driven by China’s leadership in electric vehicles. Markets have responded quickly. In Europe, Chinese EVs accounted for 8.4% of total sales by mid-2023, up from near zero just a few years earlier. Consumers are increasingly drawn to their affordability, advanced tech and modern design.

Today, Chinese brands aren’t just exporting, they’re setting new standards for innovation and digital-first mobility.

While established OEMs often operate within longer, more structured development timelines, newer players from China have introduced greater agility, enabling them to bring models to market more quickly. In many cases, they’re launching multiple vehicles across different segments in the time it takes traditional carmakers to fine-tune a single prototype. This speed is enabled by vertically integrated production, digitized supply chains and a domestic market that thrives on high-volume experimentation.

They’re not just flooding the market with budget options, many are producing feature-rich, design-forward cars that rival European luxury vehicles in both aesthetics and tech.

Take BYD, for example. Already the world’s largest EV maker by volume, it has rapidly expanded its presence in regions like Southeast Asia, Latin America and parts of Europe. In 2023, BYD overtook Tesla in global battery EV (BEV) sales, delivering 526,000 BEVs in Q4 alone, compared to Tesla’s 484,500 (source: Business Insider, 2024). The brand is known for in-house battery production, aggressive pricing and vertical integration - a combination that allows it to scale with a flexibility Western OEMs can’t easily match.

Infrastructure and influence: how emerging markets are redefining the playing field

Emerging markets are rapidly developing automotive infrastructure, from localized manufacturing hubs to EV charging networks and logistics corridors. Regions like Southeast Asia, Latin America, and parts of Africa are laying the groundwork for a new automotive ecosystem.

This evolution enables faster vehicle adoption, competitive pricing, and broader reach for automakers adapting to local dynamics. Chinese OEMs, such as SAIC, BYD and Geely, have effectively tapped into this momentum by investing early in regional assembly, dealer networks, and affordable EV models tailored to local conditions.

Their growth reflects a broader transformation. Chinese automakers now account for 8.4% of Western Europe's EV market, up from 6.2% the previous year and almost nothing in 2019. Additionally, China's export of passenger cars rose by nearly 20% in 2024, reaching almost 5 million vehicles, driven notably by "new energy vehicles" like pure battery EVs and plug-in hybrids.

As infrastructure improves and consumer expectations evolve, the path to global competitiveness is expanding beyond traditional regions, encompassing the cities, ports, and charging corridors of emerging markets.

The global transformation with new energy vehicles

What’s driving much of the transformation in the auto industry today is the accelerated shift toward new energy vehicles (NEVs), including battery electric vehicles, plug-in hybrids and fuel cell models. OEMs across the globe are investing heavily in electrification, supported by government incentives, changing consumer preferences and increasingly ambitious climate regulations. This global pivot has reshaped R&D priorities, encouraged tighter integration of hardware and software and increased focus on battery performance and supply chain resilience.

Within this global movement, Chinese manufacturers have emerged as influential players, largely due to their scale, production speed and vertical integration. In 2023, over 60% of the world’s EVs were produced in China not just by domestic brands, but also through joint ventures with international automakers (Council on Foreign Relations). Their lead in battery technology and cost efficiency continues to raise the bar across the global industry.

What more established automakers are doing about it

European carmakers aren’t standing still, but they are facing pressure from every direction. From compliance with Euro 7 emissions regulations to the phasing out of combustion engines and a bruising post-COVID supply chain recovery, the timing of the Chinese expansion couldn’t be more challenging.

Some brands are responding with speed and innovation. For instance, Volkswagen is doubling down on its EV lineup and fast-tracking software integration through its CARIAD division. Stellantis has partnered with Leapmotor, a Chinese EV maker, to co-develop and sell models under new branding. Renault and Nissan are both pursuing local joint ventures in China to stay competitive and tap into domestic supply chains.

Others are taking a collaborative approach. BMW continues to deepen its relationship with Chinese manufacturer Brilliance Auto, producing electric models tailored for both domestic and export markets. Via its connection with Geely, Mercedes-Benz is exploring shared platforms and technology to accelerate electrification.

In short: global carmakers are increasingly recognizing that working with Chinese OEMs rather than against them might be the most viable path forward.

Europe’s role in a changing landscape

Regulatory pressure and consumer expectations in Europe are accelerating the need for transformation. The EU’s 2035 ban on ICE vehicles looms large, and the average European buyer is becoming more EV-savvy — more interested in range, charging networks, and digital features than in horsepower or brand legacy.

That’s fertile ground for Chinese OEMs, especially as they invest in regional assembly and after-sales infrastructure. But it also presents an opportunity for Europe’s legacy brands to reassert themselves by emphasizing quality, sustainability, and trust — pillars that still resonate strongly across EU markets.

There’s also a growing emphasis on software-defined vehicles (SDVs), an area where Western companies, including TomTom, are driving innovation in navigation, automation and safety systems. SDVs represent the convergence of automotive and tech, and it’s where the next real competition will play out.

The auto industry reconnects in Shanghai

Auto Shanghai has become one of the most important mobility showcases in the world, a true barometer of where the global auto industry is heading. The 2025 edition is expected to be a proving ground for new models, battery innovations and SDV platforms. Chinese automakers will be front and center, but so will global players looking to reclaim their edge.

TomTom is at the heart of this transformation. From maps for automation, real-time traffic to ADAS and software platforms that support the shift to electric, TomTom’s technology is powering the new generation of vehicles. What’s on display at Auto Shanghai this year underscores how crucial navigation, data and collaboration are in a market that’s moving faster than ever.

What’s more, with our ongoing and new partnerships with customers such as smart Automotive for EV solutions, TomTom continues to support the automotive industry in this changing and dynamic era of transformation.

The road ahead

The rise of Chinese OEMs is a wake-up call. It’s also a chance for the global automotive industry to evolve in ways that benefit consumers, climate goals and future tech. For established carmakers, adapting means building smarter, cleaner and more connected vehicles - and doing it quickly.

For players like TomTom it means being a reliable, future-forward partner as the auto landscape continues to shift.

The road ahead is electric, global and increasingly defined by partnerships. It’s an era of rapid changes as we’ve seen in the past where new technology forced an entire industry across the global to switch directions and evolve, we’ve seen it with the industrial revolution, with the arrival of internet and the dotcom boom… now as we experience yet another shift, we are eager to see what's on the other side of this transition.