How China Became a Big Car Exporting Country?

tendata blogMarket Insights

ten data blog17-08-2023

car exporter,china car exporters,leading car export

Car enthusiasts tend to fall into one of two camps: those who flatter the power and speed of German car engineering; and those who love it. those who consider Japanese cars superior and appreciate their reliability and value for money.

For decades, the two countries have vied for the status of the world's leading car exporter. But the dominance of the two is coming to an end. China is already the world's largest automaker and is on track to overtake its rival in terms of exports.

Until a few years ago, Chinese automakers' attempts to break into overseas markets had been stagnant.In 2015, China exported fewer than 375,000 vehicles a year, less than India and roughly on par with Germany and Japan's single-month exports. But by around 2020, the country shifted. in 2021, China exported nearly 1.6 million vehicles. By 2022, that figure will reach 2.7 million. 2023 will see further growth in international sales. Customs data shows that in the first six months of this year, the country sold almost 2 million vehicles, or more than 10,000 per day.

China's nascent car industry exports mainly to poorer countries, but many Western consumers are now buying Chinese-made cars for the first time. exports to Australia tripled year-on-year in the first half of 2023 to more than 100,000 vehicles, while sales to Spain rose 17-fold to nearly 70,000 vehicles. But many of these cars are Western brands. about a tenth of the cars exported in 2022 came from the American electric car brand Tesla. MG Motor, initially a British brand, and Swedish carmaker Volvo are now owned by Chinese companies. Their models also account for a large proportion of cars exported overseas.

The country's expertise in electric vehicles (EVs) is partly responsible for the surge in exports. Despite its manufacturing prowess, China has never mastered the internal combustion engine, which has hundreds of moving parts and is tricky to assemble. The emergence of battery-powered vehicles, which are mechanically simpler and easier to manufacture, has helped China catch up. between 2009 and 2019, the country invested an estimated 676 billion yuan ($100 billion) in electric vehicle technology, putting China in the lead. Today, battery-powered vehicles account for a fifth of China's car sales and a third of its exports. In Japan and Germany, electricity accounts for only 4 percent and 20 percent of exports, respectively.

The war also boosted Chinese exports to Russia. after the February 2022 invasion of Ukraine, most Western automakers ceased operations in Russia. Their withdrawal allowed their Chinese competitors to seize market share. in the first half of 2023, russia imported nearly 300,000 chinese cars valued at $4.5bn, a six-fold increase from 2022. the Russian car market is expected to grow at an annual rate of 1.4% per annum in the first half of the year. According to analyst firm Autostat, Chinese cars accounted for nearly 80 percent of imports in July.

China's export giant looks unlikely to slow down anytime soon. Consulting firm AlixPartners estimates that overseas sales of Chinese-branded cars could reach 9 million units by 2030, double the amount exported by Japan in 2022. While these homegrown brands remain relatively unknown in the West, the cars tend to be cheap on average Chinese-made cars cost about 40 percent of those made in Germany, and are popular in emerging markets such as Brazil.

There are still speed bumps ahead. China's electric car makers may be seeing a surge in sales, but few are making money. The industry is bolstered by state subsidies, which were recently renewed after sales growth slowed. But the subsidies may not last forever.

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