China comes just shy of Japan as the world’s largest car exporter

by -50 Views

LIANYUNGANG, CHINA – JANUARY 17, 2024 – A large number of cars are ready to be shipped for export at the port of Lianyungang, Jiangsu province, China, January 17, 2024. (Photo credit should read CFOTO/Future Publishing via Getty Images)

Future Publishing | Future Publishing | Getty Images

BEIJING — China failed to replace Japan as the world’s largest exporter of cars in 2023, despite coming close to doing so, data released this month showed.

Japanese customs data showed the country exported 5.97 million vehicles last year, more than the 5.22 million vehicle exports that China customs data reported.

More than 70% of China’s car exports in 2023 were of gasoline-powered vehicles, according to the Ministry of Commerce, noting that new energy vehicle exports were growing rapidly.

Many of those gasoline-powered cars went to Russia, said Sarah Tan, economist at Moody’s Analytics.

“After Russia’s invasion of Ukraine in February 2022, many auto manufacturers had left the country only to have that gap filled by Chinese manufacturers,” she said. “In the first eleven months of 2023, auto shipments to Russia rose about six times that of 2022 in value terms.”

Mexico was also a major destination for Chinese exports of gasoline-powered cars, Tan said, while auto exports to Belgium and the U.K. were mostly new energy vehicles.

In fact, Mexico was the second-largest destination for Chinese cars after Russia, said Jorge Guajardo, Washington, D.C.-based partner at Dentons Global Advisors and a former ambassador of Mexico to China.

Chinese-made cars have quickly increased their share of Mexico’s auto market, a “new phenomenon” since the central American country has traditionally been highly protective of its auto industry — the top employer in Mexico, Guajardo said in a phone interview.

While he said it’s still unclear exactly why Chinese cars are growing so quickly in Mexico, part of the reason is international automakers.

“The factories, the plants that they had in China that were meant to be for the Chinese market that which they’ve now lost, you’re going to start redirecting that capacity to export from China abroad,” he said, noting he think’s “there’s a lot of overcapacity in China for auto manufacturing.”

Electric vehicle sales

China’s new energy vehicle penetration reached 40% of new passenger car sales toward the end of 2023, far higher than around 7% in the U.S.

Analysis by CNBC late last year found that rapid transition to electric cars is quickly eroding market share from international auto giants, who have been slower to release new models in the category. Germany’s Volkswagen was among the foreign car companies on track for their worst China market sales in years.

Chinese battery and electric car company BYD also topped Tesla in overall vehicle production in 2023 — more than 3 million vehicles — and sold more battery-powered cars than the U.S. automaker in the fourth quarter.

BYD’s overseas sales in 2023 exceeded 242,000 new energy passenger vehicles, according to CNBC calculations of public data. The company did not disclose comparable 2022 figures.

Local vs. overseas markets

Chinese car makers will likely increase their share of the domestic auto market to 75% by 2030, said Francoise Huang, senior economist at Allianz Trade.

That would result in a nearly 40% drop in European car sales in China, she said.

As China-made electric cars also extend their reach to Europe, the European Union has launched a probe into the role of government subsidies for production of those electric vehicles.

Read more about electric vehicles, batteries and chips from CNBC Pro

“I think they’re gonna very soon realize that they’re targeting the wrong sector,” Guajardo said.

Chinese-made “EVs are superior to any operating [the Europeans] have, so you’re just trying to block something that is better,” he said, adding that those electric cars ultimately aren’t the majority of China’s auto exports.

Guajardo expects these developments will lead to trade wars, at least in the case of Chinese car sales to Mexico.

“I wish it were EVs because if it were EVs, not only are they good but they are a quality product that save the environment,” Guajardo said. “Gasoline-powered cars are just a competition with Mexican products.”

Sumber: www.cnbc.com

No More Posts Available.

No more pages to load.