The world's auto giants will need to partner with Chinese companies to survive in China, analysts say

BEIJING — Time is running out for traditional foreign automakers to adapt to China's electric car market, signaling to industry analysts that companies must double down on local partnerships to survive.

Fossil fuel-based automakers have struggled to hold their ground in the world's largest car market, which has swiftly transformed into one where new energy vehicles now account for more than half the country's car sales.

If the foreign brands "can't launch competitive clean energy vehicles in the China market soon, the only hope for salvaging any market share is likely via partnership with a domestic player," said Tu Le, founder and managing director of Sino Auto Insights.

"But is it too little too late? Perhaps for a number of foreign brands," he said.

U.S. automaker General Motors, Germany's Volkswagen and Japan's Nissan each saw their China revenue drop between 2019 and 2023, according to CNBC's calculations of company data.

In 2023, South Korea's Kia reported China sales more than 30% lower than 2020 levels. Tesla in comparison said its China sales surged by more than six times between 2019 and 2023.

As investor concerns grow, management are deliberating plans. GM CEO Mary Barra said on an earnings call last month the company had meetings lined up with shareholders and joint venture board members to discuss "restructuring" in order to improve profits in China, once GM's top market by revenue.

U.S., German and other foreign automakers that entered China decades ago were required by Beijing to form joint ventures with local companies, typically state-owned.

Only in 2022 did Chinese authorities allow foreign car companies to fully own their local production. But it was a lucrative market, with GM and Volkswagen holding the top