Introduction: Along with the scale advantage of China’s new energy vehicles and the demand for market expansion, more and more new energy products made in China are going out of the country, and their recognition overseas continues to improve.
In 2024, China’s auto industry delivered an outstanding answer sheet.Data from China Association of Automobile Manufacturers (CAAM) showed that from January to October 2024, China’s automobile production and sales amounted to 24,466,000 and 24,624,000 respectively, with a year-on-year growth of 1.9% and 2.7% respectively.
Among them, the production and sales of new energy vehicles amounted to 9,779,000 and 9,750,000 respectively, up 33% and 33.9% year-on-year.According to previous forecasts, it is expected that China’s total automobile sales will exceed 31 million units this year, and the sales of new energy vehicles are expected to reach 12 million units.
While the total production and sales of automobiles continue to rise, in terms of exports, China has likewise ushered in a brand new breakthrough.Data show that from January to October 2024, China’s auto exports totaled 4,855,000 units, up 23.8% year-on-year.
In terms of vehicle types, passenger cars exported a total of 4.1 million units, up 10.1% year-on-year; commercial vehicles exported a total of 755,000 units, up 22.5% year-on-year.
For the performance of automobile exports, the previous passenger association branch secretary-general Cui Dongshu analyzed that this year’s main driving force is still the competitiveness of China’s products and Europe and the United States market growth, as well as the Russian market, the international brand of the Russian market is fully replaced by the Chinese car, especially China’s fuel vehicle export competitiveness to enhance the export of the export of the increase brought about by.
Along with the scale advantage of China’s new energy vehicles and the demand for market expansion, new energy products made in China are increasingly going out of the country, and their recognition overseas continues to rise, said the CIBSA.
Record Exports
The World Needs Chinese Cars
In 2017-2020, China’s auto exports remain at around 1 million units, while in 2021, they begin to grow at a high rate.
According to the data, China’s automobile exports amounted to 2.19 million units in 2021, 3.4 million units in 2022 and 5.22 million units in 2023, making it the world’s largest exporter of automobiles.In 2024, China’s automobile exports continued to grow strongly.
Markets such as Russia, Mexico and the United Arab Emirates have made notable contributions to the surge in the number of Chinese car exports.
Since the beginning of 2023, Russia has been the number one export destination for Chinese automobiles, with China exporting more than 900,000 complete vehicles to Russia, a year-on-year increase of up to 459%.Entering 2024, Russian demand is rising again and remains the largest exporter of Chinese cars.
Singapore’s Lianhe Zaobao website previously reported that Chinese car sales in Russia have hit a record high, and Russia has become the largest market for Chinese car exports.
In February 2022, European and Japanese and Korean car brands accounted for 69% of sales in the Russian auto market, which has now dropped to 8.5%, according to data from Russian analyst Avtostat.Meanwhile, the market share of Chinese carmakers in Russia has risen sharply from 9% to 57%.
China Automobile Circulation Association passenger association branch data show that from January to September this year, China’s exports of cars to Russia reached 849,951 units, up 33% year-on-year, fault leading other regions.
In addition to the Russian market, the top ten countries in terms of total vehicle exports from China to overseas markets during January-September 2024 were Mexico, the United Arab Emirates, Belgium, Brazil, Saudi Arabia, the United Kingdom, Australia, the Philippines, and Turkey, with export quantities of 353,416, 230,819, 217,547, 205,416 units, respectively,185089, 150737, 133171, 122706 and 102,395 respectively.
Among the above countries, Russia, Brazil, the United Arab Emirates, Mexico and Belgium have stronger growth, and Russia and Brazil have become the core regions of China’s automobile export increment.
In terms of drive forms, fuel vehicles continue to make a significant contribution to Chinese auto exports, especially in the Russian, Mexican and UAE markets, where Chinese cars have developed a distinct identity.
Meanwhile, the strong performance of new-energy vehicles has further contributed to the booming development of China’s auto exports.
Among them, in the Mexican and Brazilian markets, the export increment of plug-in hybrid vehicles was more prominent.In terms of pure electric vehicles, the stronger performers were the markets of Belgium, Thailand and the United Kingdom.
Regarding China’s strong performance in new energy vehicles, Zhao Yang, vice president of the automotive industry branch of the China Council for the Promotion of International Trade (CCPIT), said China has made remarkable progress in the field of new energy vehicles.
On the one hand, the scale of China’s new energy automobile industry is growing rapidly, and China’s new energy automobile industry has become a key force in promoting the rapid development of China’s automobile industry.
On the other hand, China’s new energy automobile industry is highly competitive, forming a complete industrial chain from upstream mineral raw material processing, power battery to downstream vehicle, and occupying a dominant position in each industrial chain link.
Diversifying into the sea
Chinese car companies are developing comprehensively
The surge in exports has filled the world with Chinese cars.However, while expanding vehicle exports, Chinese car companies should also accelerate the promotion of localized production in overseas markets.
From the simple export trade model gradually developed into overseas factory, local procurement of parts and components, local sales approach, which to a certain extent will achieve the goal of deep localization of strategic markets.
In this regard, Chery Holding Group party secretary and chairman Yin Tongyue once said, Chery went out for more than twenty years, there are a lot of lessons learned, one of the deepest feeling is that: once you enter a market, we have to change from “you” to “we”, to comply with local laws and regulations, respect local customs and habits, and to root as a local “corporate citizen”.
We have to comply with local laws and regulations, respect local customs and habits, and take root as a local “corporate citizen”.
At the same time, Yin Tongyue believes that it is necessary to go into overseas markets in a “rooted” way and become a “contributor” for the benefit of the world.
A truly globalized enterprise not only carries out globalized trade and arranges globalized market, but more importantly has globalized management concept, globalized responsibility and value contribution.
Wei Jianjun, chairman of Great Wall Motors, agreed: “Chinese car companies ‘going overseas’ are less competitive and profitable when they don’t have localized production in many regions and have higher tariffs.In addition, other countries won’t let you sell Chinese cars locally without limits.”
Wei said that in the face of globalization is not electrification can be solved, each region has different market demand, globalization is to produce products to meet local demand.
At present, there are already some Chinese car companies have made progress in localized production in overseas markets.
Shanghai Securities pointed out that in the past, Chinese car companies mainly took the form of export and overseas assembly of loose parts to expand overseas markets, but subject to the implementation of tariff measures in some countries or regions, the investment in full-process manufacturing is gradually emerging.
At present, Chinese car companies have built and put into production full-process manufacturing plants in several countries.
Today, a number of Chinese automakers, including BYD, Chery, Changan, Great Wall, GAC and SAIC, have set up several overseas factories in countries such as Thailand, Indonesia and Brazil.
For example, Chinese automakers such as SAIC MG, Great Wall, Changan, BYD, Nezha, and EAN have all built factories in Thailand.
With the trend of new energy and intelligence, they have not only successfully seized the local market in Thailand and radiated the Southeast Asian market, but also used the Thai market as a springboard to help China’s automotive globalization in depth.
Overseas factories or become a must-go road for Chinese car companies to go overseas, short-term view, through overseas bases to bypass the tariffs imposed by some countries on China’s new energy vehicles, and in the long term, the establishment of overseas bases, the promotion of the Chinese brand, expanding China’s automotive global influence has a great role.
Chinese Brands Going Overseas
New Responses Needed
China’s automobiles have made brilliant achievements overseas, but at the same time, Chinese car companies have also ushered in brand new challenges.With protectionist tendencies intensifying in some countries and regions, the long-standing barrier problem in the international automobile market has become even more serious.
At the same time, the EU’s new battery law, the carbon border adjustment mechanism, the levy of “countervailing” tax and a series of measures to accelerate the introduction of the relationship between Chinese and foreign enterprises to compete in the transformation of China’s automotive overseas facing a series of new situations, new challenges.
In the view of Wang Zhao, President of China Automotive Standardization Research Institute of China Automotive Technology Research Center Limited, the new challenges faced by Chinese automobiles going overseas at present mainly include three aspects:
First, China’s automobile industry is still not sufficiently researching the international market.
On the one hand, China lacks the initiative in the coordination system of existing international standards and regulations, and lacks the ability and experience to deal with disputes; on the other hand, there is a lack of synergy among automobile enterprises in going overseas, which leads to “fighting outside the internal battle” and “rolling up inside the overseas”.
In the process of going overseas, some automobile enterprises are fighting on their own, which leads to the problem of high homogenization of target markets, products and models, and damages the overall interests of the industry.
Wang Zhao suggests that, on the one hand, Chinese automobile enterprises should strengthen strategic planning from the national and industrial heights, establish coordination and cooperation mechanisms for automobile enterprises going abroad, smooth the exchange of policy, technology and market information, and encourage in-depth cooperation at the levels of research and development, purchasing, production, and infrastructure, to form a synergistic pattern of development of the whole vehicle and its parts and components, and upstream and downstream industrial chain, so as to enhance the competitiveness of exported products and services, and enhance their influence on the global industrial chain and the supply chain innovation chain.
On the other hand, Chinese automobile enterprises can rely on the United Nations World Forum for Vehicle Regulations Harmonization, the International Organization for Standardization and other platforms to strengthen the coordination of international standards and regulations in strategic emerging areas, coordinate planning and focus on breakthroughs in key core projects, while actively expanding the cooperation platform of regulations and standards, and promoting the rules and standards of the “soft linkage”.”This is also helpful for the coordination of international standards in key areas of the target market.
This also helps to systematically analyze the layout of intellectual property rights in key areas of the target market, form a core technology intellectual property protection barrier as soon as possible, and reduce the potential risks of China’s automobile enterprises.
Secondly, compared with developed countries, although Chinese automobile enterprises have a certain leading edge in core technologies such as power battery, the overall advantage is not obvious.
There is still a gap in traditional parts and basic system technology, limited platform design and manufacturing capacity, and the industrial chain, especially the core parts supply chain security risks are highlighted.
Wang Zhao suggests that, firstly, Chinese automobile enterprises should coordinate domestic and international resources, focus on strategic emerging fields, actively carry out cross-industry resource complementation and mobilization, and jointly build a multi-level and systematic linkage system of “information-experts-channels” to realize the integrated and optimized allocation of resources in key areas and core fields.Secondly, we should rely on and give full play to China’s resources in key areas and core fields.
Secondly, we should rely on and give full play to China’s advantages in large-scale market, industrial integration and technology integration, link up two kinds of resources domestically and internationally with a long-term mindset, improve the quality and level of trade and investment cooperation, and raise our alertness to strategic miscalculations such as hasty achievement, blindly following the trend, and piling up at sea.
Third, we should accelerate the establishment of a global joint R&D system led by the headquarters, master key core technologies, realize scientific and technological self-reliance and self-improvement, and build an autonomous and controllable, safe and efficient industrial chain supply chain.At the same time, with the starting point of improving product function, performance and quality, and following the development trend of digitization, we will continue to strengthen the research and system construction of new types of security, such as functional security, network security and data security, so as to comprehensively improve the security guarantee.
Thirdly, the overall scale of China’s overseas automobile sales is not small, but it is relatively fragmented when calculated by a single enterprise.
Export models are mainly low-end and mid-range, with low brand image and value, and an immature after-sales service system.
Data show that in 2023, the world’s top five automobile group global sales of more than 6 million units, while China’s brand sales of automobile enterprises up to the level of one million units of only five, and Germany, Japan, South Korea, overseas sales accounted for the overall proportion of more than 80%, while China’s head of the overseas sales of several head of the sea of automobile enterprises accounted for only in the beginning of the 40%.
This is both the Chinese car companies to go overseas late, the lack of international talent reserves, but also with the car companies generally low-priced, cost-effective positioning to start, the enterprise in the design, functional strength and international image of the strength of the construction of insufficient investment is irrelevant.
Wang Zhao suggests that Chinese automobile enterprises intending to fight for overseas markets should, in addition to continuing to practice good “hard skills”, adjust the strategic direction of the enterprise, accelerate the formation of outward-looking, specialized international talent selection and training mechanism, and form a “soft power” talent pool as soon as possible, which covers the areas of industrial design, corporate culture, brand publicity, institutional compliance, etc. The company should also make efforts to build, enhance and maintain its international image.”Soft power” aspects of the talent pool, efforts to create, enhance and maintain the international image of the enterprise.
At the same time, car companies should also actively establish communication and cooperation with domestic and foreign media, netizens and other key opinion leaders, handle public relations, and form a communication matrix in order to more effectively make the impression of Chinese automobiles better and better among potential foreign buyers.
Source: New Energy Vehicle News
