China surges to top of global auto exports

China’s overseas auto sales surged to a record last year, on track to surpass Japan as the world’s biggest exporter and marking a tectonic shift for the global auto industry.

While China has become acknowledged as a world leader in electric vehicles, traditional gas-powered autos were the main driver of the increase, with demand surging especially in Russia, The Wall Street Journal reports.

Chinese carmakers seized the void left in the country by the departure of Western carmakers following the war in Ukraine, selling at least five times as many vehicles there last year than the 160,000 it sold in 2022, according to the China Passenger Car Association.

The association on Tuesday estimated 5.26 million made-in-China vehicles were sold overseas last year and said that would likely be almost a million more than exports of made-in-Japan cars. Japan shipped just under four million vehicles abroad during the first 11 months of 2023, according to the country’s most recent official data.

The resilience of demand for internal combustion engine vehicles in countries such as Russia and Mexico boosted car manufacturers that have factories in China and have struggled with the country’s aggressive transition to electric vehicles. Some of the carmakers shifted their focus to exports as demand for gas-powered vehicles has shrunk in China.

Concern about a potential flood of Chinese vehicles from companies with overcapacity in China has risen in recent years in major auto markets. The U.S. largely shuts out Chinese imports with prohibitive tariffs, while European Union regulators in September unveiled an antisubsidy probe centred on low-cost electric vehicles from the country. Beijing has denounced the EU’s investigation as protectionist.

China’s next wave of exports is likely to include more electric vehicles and hybrids. Makers of such vehicles also saw a rise in overseas shipments last year and they are planning to significantly increase exports now that years of tearaway growth in China’s EV market is slowing, after government subsidies for buyers have been scaled back.

China’s BYD, which ousted Tesla as the world’s top-seller of EVs in the most recent quarter, saw overseas sales jump almost five times to 242,000 in 2023. It is expanding showrooms across Europe as it targets more sales there this year.

Volkswagen will begin exporting its China-made Cupra Tavascan EV coupe to Europe this year. 

The rise of China as the centre of the world’s automaking industry represents a hard-won victory for Beijing’s industrial policies, following similar achievements in solar panels and batteries. 

China has long been the world’s biggest auto market and production centre, but growth was driven by foreign carmakers until recent years, when domestic brands embraced electrical vehicles and hybrids as the state bankrolled local manufacturers and subsidized sales.  

Now it has added the top exporter crown as, over the past three years, it rapidly moved past long dominant rivals Japan, Germany and South Korea.