Exporting new energy cars from China

Exporting new energy cars from China

Why Chinese cars? Why are these countries buying in large quantities? 

Friendly foreign trade policies, high cost performance, and first-mover advantage in the research and development of new energy vehicles may be the key answers to the questions

China's auto exports surpassed Japan and became the world's largest auto exporter.

Driven by the transformation of new energy sources, Chinese auto brands have risen rapidly. Not only domestic sales are rising steadily, but global sales are also hitting new highs.

According to data from the China Association of Automobile Manufacturers, from January to May 2023, auto companies exported 1.758 million vehicles, a year-on-year increase of 81.5%. The export of new energy vehicles was 457,000, a year-on-year increase of 1.6 times.

It should be known that China sold 11.617 million automobiles domestically during the same period, and domestic demand and exports of automobiles were booming, which is rare in the world.

A major auto exporting country generally has to meet two conditions: one is that its own industrial structure is complete and its production capacity is strong, and the other is that its domestic market cannot be so large that its production capacity cannot overflow. 

Both export and domestic sales are booming, which means that China's automobile consumer market has a strong consumption capacity, and the products produced have a strong influence on a global scale.

So, who bought so many Chinese cars?

Can such a huge export volume be sustainable? The overseas business environment is different from that in China, what should be paid attention to?

Throughout the history of world automobile export, in the 20th century, due to the outbreak of three oil crises, Japanese and Korean automobiles were able to dominate the European and American automobile import markets. Although this automobile market pattern has fluctuated slightly, it has continued to this day as a whole. At present, China's new energy vehicle exports have the possibility of breaking this pattern.

Behind the blowout of China's auto exports is the good business environment between importing and exporting countries, the strong cost performance of Chinese auto products, and the development potential brought about by the pre-emptive layout in the fields of new energy and intelligent networking.

At the same time, we need to be soberly aware that China's auto industry still has a long way to go on the road from a big exporter to a powerful exporter.

They are buying Chinese cars, why?

From January to April 2023, the top ten countries in terms of automobile export volume are Russia, Mexico, Belgium, Australia, Saudi Arabia, the United Kingdom, Thailand, Spain, the United Arab Emirates and the Philippines.

These countries are distributed all over the world, from Western Europe to Southeast Asia, and from the Middle East to Latin America. There are both traditional automobile powerhouses and rapidly developing emerging automobile consumer markets. 

Why do these countries with obvious differences buy Chinese cars in large quantities?

From a detailed judgment, the main reasons are: the spring breeze of foreign trade policy, the main cost-effective products and the potential for innovation in new technologies.

The reason is most special in Russia, whose auto manufacturing industry has previously relied on Western investment, parts supplies and partnerships. 

Affected by the conflict between Russia and Ukraine, a large number of multinational car companies have stopped exporting to Russia, producing cars in Russia, and supplying spare parts.

In March, Russian largest automaker, Avtovaz, announced an early opening of its factories and an extended summer break due to a shortage of parts. Affected by this, Russia's automobile consumption has completely entered the seller's market, and the price of vehicles has generally risen.

In this context, Chinese car companies that can supply stable supplies have reaped dividends. 

In 2022, Russia will import a total of about 117,000 passenger cars from China, an increase of 40% over the previous year. China has become Russia's main source of imported passenger cars.

According to statistics, in the past year, Russia has added 487 Chinese car brand dealership stores; currently, one out of every three car dealerships in Russia sells Chinese cars.

The benefits of low tariffs make Chinese cars more cost-effective. This is particularly evident in the Australian and Southeast Asian markets.

This year again, Russia has become the largest market for China's overseas auto exports, which is also a new breakthrough point. Due to the problems of the world situation, the performance of international auto brands in Russia has been weak. 

Chinese autos have ushered in new opportunities for development in the Russian market and have achieved very good performance. As of the first quarter of this year, the sales volume of Chinese cars in the Russian market has achieved remarkable results, with a total of 66,000 vehicles, accounting for 43% of the overall market share in Russia. 

Nearly half, this data is amazing. Chinese auto brands even occupy several seats in the top ten of the Russian sales rankings. Among them, Chery Automobile has occupied the championship for a long time, which can be said to be a thriving one. Its strength is like the previous dominant position of Toyota and Volkswagen in the country.

The continued growth of China's auto exports has benefited from growing global demand for clean energy vehicles and high-quality passenger vehicles.

In the field of new energy vehicles, China actively promotes the research and development and application of electric vehicle technology, and has now become the world's largest new energy vehicle market. 

China's battery technology, electric drive system and intelligent network technology are at the international leading level.

The rapid development of new energy vehicles will provide new momentum for China's auto exports.

Today, new energy vehicles are the vanguard. 

The key areas of China's new energy vehicles have both technological advantages and industrial chain resilience, combined with domestic comprehensive manufacturing cost advantages and intelligent first-mover advantages, showing strong competitiveness.

On the whole, a stable supply chain, high cost performance, first-mover advantage in the research and development of new energy cars, and preferential foreign trade policies are the possible reasons why Chinese automobiles can be exported in large quantities overseas.

If you are interested in exporting new energy cars from China. Feel free to contact us.

We will provide you with professional advice and services.

Shawn.Liao(Mr.) ,E-MAIL：sales04@viputrans.com ;Phone/Wechat:+8618926970495;Whatsapp/Skype: +8613431563558

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