By Peter Bergman (MoneyAmped.com)
In accordance with the China Passenger Car Association (CPCA), China is projected to surpass Japan as the leading global auto exporter in 2023. The significant advancements made by domestic automakers like BYD and Chery in increasing their presence in foreign markets are responsible for this accomplishment.
In 2023, the largest auto market in the world achieved a significant milestone by becoming the leading auto exporter. The CPCA revealed in a press conference that car exports surged by an impressive 62%, reaching an all-time high of 3.83 million vehicles. According to Japanese customs data, the number of passenger car exports reached 3.5 million during the initial 11 months of the year, not including second-hand cars.
China’s Auto Exports Surpass Those of Japan
Last year, China’s auto exports reached an impressive 5.26 million units, with a total value of approximately $102 billion. In contrast, the association reported that Japan’s projected exports for the entire year were around 4.3 million units.
The figures provide the most recent evidence of China’s emergence as a dominant force in the global automobile export industry, primarily driven by the success of its agile electric vehicle manufacturers. During the fourth quarter, BYD surpassed Tesla (NASDAQ:TSLA) Inc as the leading global seller of electric vehicles (EVs), primarily driven by its strong sales in China.
The growing influence of China in foreign markets has raised concerns among certain governments, who are worried about the potential impact on their local automobile manufacturers.
In September, the European Commission initiated an investigation into electric vehicles manufactured in China due to potential subsidies they may have received. Beijing criticized this action as being “protectionist.” Last month, the Wall Street Journal reported that the Biden administration in the United States is currently engaged in discussions regarding the potential increase of tariffs on certain Chinese goods, including electric vehicles (EVs).
On Friday, Chinese customs will release the trade statistics for December.
Tesla, which shipped out an impressive 344,078 electric vehicles manufactured in China, also played a significant role in the surge of exports.
Incredible Growth Rate of the Chinese Car Market
In 2023, China’s domestic auto market, which is the largest in the world, continued to make steady progress. Vehicle sales saw a 5.3% increase, reaching a total of 21.93 million units.
This marks the third consecutive year of growth for the market despite the challenges posed by fierce price competition among car manufacturers. The industry worked hard to attract consumers who were feeling uncertain due to a sluggish economic recovery.
In China, the sales of fully electric vehicles experienced a significant increase of 20.8% in the past year, following a remarkable surge of 74.2% in 2022. The sales of plug-in hybrids, which are more cost-effective compared to fully electric vehicles, experienced a significant growth of 82.5% in the past year, following a remarkable surge of 160.5% the year before.
According to UBS auto analyst Paul Gong, the sales of domestic brands in China are projected to rise to 63% by 2024, up from 56% in the previous year. This growth can be attributed to the increasing brand awareness in the electric vehicle (EV) sector and the rapid electrification of the industry.
BYD, with a 7.98% ownership by Warren Buffett’s Berkshire Hathaway (NYSE:BRKa), has been making significant strides in Southeast Asia and Europe. However, the majority of its deliveries still take place in China, where it has successfully boosted sales by offering generous incentives to dealers.
On the other hand, Tesla demonstrates superior efficiency in China, with a significantly higher number of car sales per store compared to BYD.
French car manufacturers experienced the most significant decline in China this year, as their sales dropped by 41% during the first 11 months of the year, according to data. Japanese car sales experienced a significant drop of 10.7%, while sales of U.S. brands declined by a modest 1.4%. On the other hand, sales of German vehicles experienced a 2.5% increase, whereas sales of Chinese cars saw a significant jump of 15.7%.
The level of competition is anticipated to intensify even more.
Xiaomi, a well-known Chinese smartphone manufacturer, recently unveiled its inaugural electric vehicle and expressed its ambition to join the ranks of the top five global automakers.
