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From Local to Global: Chinese Cars Accelerate on the World Stage

Daniel Kim Views  

AFP·Yonhap News

China surpassed Japan last year to become the world’s largest car exporter. It continues to show strong growth in its car exports in the first half of this year. Chinese automakers are speeding up the construction of overseas factories to avoid tariff barriers set up by the West, such as the European Union (EU), propelling China from a “major exporter” to a “powerhouse exporter” of cars.

According to the Chinese economic media outlet 21st Century Business Herald, “Overseas expansion by Chinese automakers continue to accelerate,” aiming to “evolve from a ‘major exporter’ to a ‘powerhouse exporter.'”

According to the China Association of Automobile Manufacturers, China’s car exports from January to May this year amounted to $92.9 billion, an increase of 11.6% compared to the same period last year. Car exports increased by 31.3% to a record 2.308 million units during this period. Of these, 519,000 electric vehicles (EVs) were exported, an increase of 13.7% compared to 2023.

The first-half performance of Chinese automakers also shows that their overseas market expansion is still rapid. Shanghai Automotive (SAIC), China’s largest car exporter, saw its overseas market sales increase by 13.9% to 554,000 units in the first half compared to last year. It sold 120,000 units in the European market alone, ranking in the top 20 European car brands by sales volume. During this period, Chery Automobile’s overseas sales increased by 29.4% to 532,200 units, accounting for half of its total sales (568,500 units in the Chinese market).

BYD strongly pursues a globalization strategy and shows noticeable growth in overseas sales. In the first half of the year, BYD’s overseas sales increased by 29.4% to 202,400 units compared to last year, already nearing last year’s total exports (243,000 units). BYD’s overseas sales target is to achieve double the overseas sales of the previous year over the next three years, with targets of 500,000 units this year and 1 million units next year.

Changcheng Automobile’s overseas sales increased by 62.69% to over 200,000 units while Geely Automobile recorded 197,000 units, an increase of 67%. Geely Automobile also raised its export target from 330,000 units at the beginning of the year to 380,000 units.

The future strategy of Chinese automakers is to establish overseas supply chains. The 21st Century Business Herald stated, “Chinese automakers are increasingly choosing local production through overseas factory construction to pursue long-term profits overseas,” adding, “Local production not only increases profits but also provides an effective means to avoid risks in the event of ongoing trade frictions.”

First, Leapmotor plans to mass-produce EVs starting September at a Polish factory in cooperation with Stellantis, a joint venture in France and Italy. Chery Automobile, which acquired the old Nissan factory in Barcelona, Spain, plans to start producing EVs at this factory within the year and is also pushing to construct a second factory in Europe.

BYD is building a factory in Szeged, Hungary, and aims to start operations next year with an annual production capacity of 200,000 units. On the 8th, it announced plans to build a factory and research and development (R&D) center in Turkiye by the end of 2026, with an annual production capacity of 150,000 electric and hybrid vehicles.

It’s not just Europe. Chinese automakers are also speeding up the construction of local factories in Southeast Asia. They are geographically close, have lower labor costs than China, and can benefit from local subsidy policies. For example, BYD, Shanghai Automotive, Changcheng Automobile, NETA, Aiyan (an EV brand under Guangzhou Automobile), Changan Automobile, and Chery Automobile have all acquired local factories in Thailand or are building new ones. BYD has already started operations at its Thai factory on the 4th.

Yin Tongyue, Chairman of Chery Automobile, emphasized, “In the process of Chinese cars going overseas, they must be deeply integrated into the global automobile industry supply chain” adding, “We need to explore a localized management model of Chinese innovation, overseas manufacturing, and overseas sales.”

Daniel Kim
content@viewusglobal.com

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