Data released this month shows that China has failed to overtake Japan as the world's largest exporter of cars in 2023, even though it is close to that target.
The country exported 5.97 million vehicles last year, surpassing the 5.22 million vehicles reported by Chinese customs data, according to customs data.
According to the Ministry of Commerce, more than 70% of China's car exports will be gasoline-powered vehicles by 2023, noting that new energy vehicle exports are growing rapidly.
Moody's Analytics (moody'S Analytics) economist Sarah Tan said many of these gasoline-powered cars were exported to Russia.
After Russia's invasion of Ukraine in February 2022, many automakers left Russia, and Chinese manufacturers filled the gap. "In the first 11 months of 2023, car shipments to Russia increased by about six times their value in 2022." ”
Mexico is also a major destination for China's gasoline-powered car exports, while exports to Belgium and the UK are mainly new energy vehicles, Tan said.
Jorge Guajardo, a Washington-based partner at Dentons Global Advisors and a former Mexican ambassador to China, said that in fact, Mexico is the second-largest destination for Chinese cars, after Russia.
Guajardo said in an interview that the share of Chinese-made cars in Mexico's car market is rapidly increasing, a "new phenomenon" because the Central American country has traditionally been highly protective of its largest employer in Mexico.
While it's unclear exactly why Chinese cars are growing so quickly in Mexico, he said, it's partly due to international automakers.
"Their factories in China, those factories that were originally built for the Chinese market, have now been lost, and you're going to start moving that capacity from China to overseas exports," he said. He noted that he believes "there is overcapacity in China's auto manufacturing industry."
*Electric car sales*
By the end of 2023, the penetration rate of new energy vehicles in China will reach 40% of new passenger car sales, much higher than the US of about 7%.
CNBC's analysis late last year found that the rapid transition to electric vehicles is rapidly eroding the market share of international auto giants, which have been slow to release new models in this space. Volkswagen in Germany.
It is one of the worst foreign car companies in China in several years.
BYD, a Chinese battery and electric vehicle company, also surpassed Tesla in total vehicle production in 2023 by more than 3 million units, and sales of battery-powered vehicles surpassed Tesla in the fourth quarter.
According to CNBC's calculations on publicly available data, BYD's overseas sales in 2023 exceeded 2420,000 new energy passenger vehicles. The company did not disclose comparable data for 2022.
*Local market vs. overseas market*
Francoise Huang, senior economist at Allianz Trade, said Chinese automakers' share of the domestic auto market could increase to 75 percent by 2030.
This, she said, would result in a nearly 40 percent drop in sales of European cars in China.
As Chinese-made electric vehicles extend to Europe, the European Union has launched an investigation into the role of subsidies in the production of these electric vehicles.
I think they'll soon realize that they're targeting the wrong territory. Guajardo said.
He said that Chinese-made "electric cars are better than any operation [in Europe], so you're just trying to stop something better." He added that these electric vehicles are ultimately not a major part of China's car exports.
Guajardo expects these developments to lead to a war, at least as China sells cars to Mexico.
I hope it's electric cars, because if it's electric cars, they're not only good, but they're a great product that saves the environment. "Gasoline-powered cars are just a competition with Mexican products." ”