AlixPartners has identified sustained regionalisation as the automotive industry’s defining structural shift, with demand falling across all major markets in 2026 as Chinese competition reshapes trade and technology strategies globally. Its 23rd annual Global Automotive Outlook projects US new-vehicle sales to slip 2.5% to 15.8 million this year, while China sales fall 10% to 24.6 million.

Chinese automakers are expected to export nearly 10 million vehicles in 2026, up from 7.1 million in 2025, with European Chinese-brand share forecast at 17% by 2031. Localised assembly, technology licensing, and joint ventures are seen as the next expansion phase, with suppliers shifting to a ‘China for China’ model wherever Chinese OEMs build capacity.

In the US, near-term ICE and hybrid margins risk creating the complacency the firm terms a ‘New ICE Age.’ Compliance with a renegotiated United States-Mexico-Canada Agreement (USMCA) could add up to US$2,000 per vehicle annually while forcing OEMs to run parallel strategies for USMCA-compliant and global-spec markets, with the latter drawing heavily on Chinese-origin technology.

In a statement, Mark Wakefield, Global Automotive Market Lead at AlixPartners, said: “The auto industry’s new regionalization era lands virtually every company in this industry at a critical crossroads, weighing which markets, technologies, and partnerships to invest in at a time when significant disruption is the only constant.”

Source: AlixPartners