What will the Chinese government do about OEM consolidation?

Reports coming out of China in recent months hint strongly at a looming problem of overcapacity, both in internal combustion engine (ICE) and electric vehicle (EV) manufacturing. The issue impacts both legacy international vehicle companies with joint ventures in the country and the new domestic EV companies. A combination of the move away from ICE vehicles, the slower than anticipated EV ramp-up, and economic uncertainty worldwide will almost certainly lead to consolidation in the Chinese vehicle manufacturing sector. This should not come as a surprise, as mergers, acquisitions, and consolidation among vehicle companies have been long-established features of the industry and its historical structural evolution.