Auto & Transportation

Import and export data shows that in the first quarter, mainland China's automobile exports surpassed those of Japan! With the assistance of a significant increase in exports of new energy vehicles, China's automobile exports have grown rapidly in 2023. According to import and export data, in the first quarter of this year, China's total vehicle exports reached 1.069 million vehicles, a year-on-year increase of 58.1%, surpassing Japan's 1.047 million vehicle exports in the first quarter and becoming the country with the highest export volume of automobiles in the world.

If China wants to continue to surpass Japan in the number of car exports this year, it needs to overcome at least three major challenges: low visibility, fierce international market competition, and insufficient infrastructure for new energy vehicles in overseas markets. Hong Kong may play a role in China's car exports that Hong Kong's strengths and national needs need to help China consolidate its position as the world's largest car exporter.

China's automobile exports reached a new high in 2022, with a total of 3.111 million vehicles exported throughout the year, making China the second largest automobile exporter in the world, surpassing Germany. Import and export data shows that until the first quarter of 2023, China's automobile exports still maintained a high-speed growth trend, surpassing Japan to become the world's largest automobile export country. China's automobile exports have taken off in recent years mainly due to the following factors:

Firstly, it seized the favorable opportunity for the development of new energy vehicles. China has made significant technological investments in new energy vehicles, while also improving the extended service capabilities of Chinese automobile manufacturing enterprises, making Chinese cars, especially new energy vehicles, a hot commodity for countries around the world.

According to import and export data, in April of this year, China exported 100000 new energy vehicles, a month on month increase of 28.6% and a year-on-year increase of 8.4 times, accounting for 26.6% of the total automobile exports for that month. According to import and export data, in the first four months of this year, China's new energy vehicle exports reached 348000 units, a year-on-year increase of 1.7 times.

From a global perspective, China's new energy vehicle development speed has also achieved leadership. Compared to overseas brands, China's new energy vehicles have certain competitive advantages in terms of quality, price, energy consumption, and other aspects. Against the backdrop of global low-carbon transformation, new energy vehicles have a vast market, and in the face of regional conflicts and fluctuations in oil prices, the energy costs of new energy vehicles are also lower. Therefore, China's new energy vehicles are more favored by international consumers in the international market.

Public data shows that the penetration rate of new energy vehicles in China in the first quarter of this year was 25.5%, significantly leading the global average of 13%, while Germany, Europe, the United States, Japan, and others only had 18%, 15.3%, 8.8%, and 2.8% respectively. It can be seen that China's domestic new energy vehicle brands are gradually taking on the leading role in the global new energy vehicle market.

Secondly, China has established an integrated international and domestic automotive market development pattern in the field of automotive industry development, with a sound and mature domestic automotive manufacturing industry chain and strong economies of scale. Chinese automotive products are not only aimed at the domestic market, but also at the international market. When developing and designing products, globalization is taken into consideration to manufacture automotive products that meet the needs of the international market.

Especially in terms of appearance design, product quality management and control system, supply chain quality and efficiency management, and service system development and innovation, Chinese brand cars are no less than international car brands, and even surpass international car brands in many aspects of intelligent technology, thus expanding the export scale of Chinese cars.

Thirdly, the recent new policies introduced by Chinese customs have played an important role in promoting new energy vehicles overseas. Taking Ningbo Customs in Zhejiang Province as an example, Ningbo Customs was the first to launch a one-stop supervision model for the export of new energy vehicle containers at the beginning of this year, and the first dedicated container yard for new energy vehicles in the province was put into use. Public data shows that before the launch of the new mode, the export site for new energy vehicles at Ningbo Port was limited, with a daily loading capacity of only 180 vehicles. After the launch of this mode, the daily loading capacity can be increased to over 1000 vehicles.

The above-mentioned convenience measures taken by Chinese customs for the export of new energy vehicles can undoubtedly shorten customs clearance time, reduce costs, and have more route options for overseas exports of new energy vehicles, which also stimulates China's new energy vehicle exports.

Of course, despite the rapid growth of China's automobile exports, China's automobile industry still faces difficulties in expanding into overseas markets in the future, especially in the European and American markets, which are the "backyard" of Japan's automobile industry. Japanese brands still have strong advantages in industrial chain layout and other aspects. To continue to become the world's largest automobile export country, China's automobile industry will face at least three major challenges in the future:

Low visibility. There are many Chinese automobile brands, but apart from a few, most of them have relatively low global awareness compared to international automobile brands. The future of Chinese automobiles needs to strengthen sustained brand building.

The international market is fiercely competitive. As European and American countries continue to strengthen their emphasis on the electric vehicle industry chain, China's electric vehicle exports will face fierce competition in the future. Chinese electric vehicle brands need to consider how to strengthen localized production in European and American countries, establish localized marketing and R&D capabilities, as well as the ability to build corporate brands overseas, in order to take root and attract more consumer interest from European and American countries.

Insufficient infrastructure for new energy vehicles in overseas markets. The numerous charging facilities, fast and convenient charging are the main considerations for foreign consumers to purchase new energy vehicles. Chinese automobile brands need to further strengthen cooperation with overseas markets, build more electric vehicle infrastructure, and strengthen after-sales services to attract more consumers from other countries to purchase Chinese automobile products.

Faced with the above challenges, efforts can be made from the following aspects:

One is to continue to expand the technological advantages of new energy vehicles. In the future, we will continue to increase investment in the research and development of China's new energy vehicle technology, improve the technological level and added value of our products, and promote China's new energy vehicle brands to enter the international high-end automotive market.

The second is to actively explore other markets besides the European and American markets. Compared with the markets in Europe and the United States, Chinese automobile brands should explore and enter more markets in countries and regions along the "the Belt and Road". Through China's independent automobile brands, China's hard power in automobile manufacturing, especially in the field of new energy automobile manufacturing, should be demonstrated, and people in countries along the "the Belt and Road" should be more confident in Chinese manufacturing and interested in buying Chinese products.

Thirdly, greater emphasis should be placed on localized development. In the past, many Chinese automobile companies have developed the international market, not only less actively integrating into local society for cultural exchanges, but also neglecting local labor benefits, safety guarantees, and environmental protection factors.

In the future, in order to attract more consumers from other countries, Chinese automobile enterprises should pay attention to the cultivation of localization awareness, active learning and master the local system and culture, abide by the rules, form a positive interaction with the local community, actively integrate into the local culture, understand the local customs, adapt to local needs, and actively cooperate with local private enterprises. Only by gradually being accepted and recognized by the people of the country where the investment is located, can Chinese automobile companies develop smoother and faster.

Finally, Hong Kong can play the role of an international financial center and an international metropolis. The Hong Kong SAR government and officials should be more proactive in inviting mainland Chinese automobile companies to list on the Hong Kong Stock Exchange. Through Hong Kong's international influence and reputation as an international financial center, they should entrust Hong Kong's international high-end advertising and public relations companies to jointly create Chinese automobile brands through Hong Kong's international metropolis platform, in order to assist mainland Chinese automobile companies in exploring more international markets. If Hong Kong can seize the opportunity of Chinese automobile companies vigorously exploring the international market, it is believed that it will be able to take a share of the wave of China becoming the world's largest automobile export country.