Auto & Transportation

In the first 10 months of this year, the Chinese auto market has made steady progress against the pressure of lack of cores, rising prices of raw materials, and the impact of the epidemic. According to the data released by the China Automobile Industry Association recently, China's automobile export volume reached 2.615 million in January-October, a record high. Among them, 109000 new energy vehicles were exported in October, 1.2 times higher than the previous month and 81.2% higher than the previous year.

Experts believe that both the guaranteed supply and the increase of market share of independent brands are due to the improvement of China's automobile industry chain. China's auto sales are hot overseas, and foreign investment in China's auto market means that "Made in China" is increasingly recognized.

Speed up the pace of expanding global market

"There used to be a lot of Nissan and American-made cars on the street, but now there will be some strange models. Upon enquiry, it was originally made in China." Li Peizhen, who lives in Bataling Jaya, Malaysia, said that her city is relatively prosperous, and it is nearly a year or two to see Chinese cars appear more frequently. "It mainly focuses on new energy vehicles, which are good-looking models. I heard from friends that the quality is also good, and the price is similar to other imported vehicles, but the cost performance is relatively higher." Li Peizhen is very confident in "Made in China". She said that if the budget is sufficient for the car change next year, she is willing to consider Chinese cars. "I hope Chinese cars can open the Malaysian market faster."

The increasing recognition of Chinese cars among overseas consumers is a direct result of the acceleration of domestic cars' "going to sea". According to the data released by the China Association of Automobile Manufacturers, China's automobile exports hit a new high in October, and the export of automobile enterprises reached 337000 vehicles that month, up 12.3% month-on-month and 46% year-on-year. According to customs data, from January to October, automobile enterprises exported 2.456 million vehicles, up 54.1% year on year. "This number has surpassed Germany, second only to Japan, and ranks second in the world." Xu Haidong, deputy chief engineer of the China Automobile Industry Association, predicted that the total number of Chinese automobile exports this year is expected to exceed 3 million.

Customs data showed that in October, 279000 passenger cars were exported, up 11.6% month-on-month and 40.7% year-on-year. From January to October, 1.975 million passenger cars were exported, up 57.1% year on year; In October, 59000 commercial vehicles were exported, up 15.5% month-on-month and 77.5% year-on-year; The export of new energy vehicles in October was 109000, 1.2 times higher than the previous month and 81.2% higher than the previous year. From January to October, 499000 new energy vehicles were exported, up 96.7% year on year.

In terms of vehicle types, fuel vehicles are still the main force of domestic automobile exports. According to customs data, in the first 10 months of this year, a total of 1.957 million fuel vehicles were exported, accounting for about 80%. Previously, Great Wall, Chery and other auto companies still exported fuel vehicles, mainly to Southeast Asia, Latin America and Africa.

Where is the exit?

Cui Dongshu, Secretary-General of the National Passenger Car Market Information Joint Conference, analyzed that customs data showed that from January to October this year, Europe, North America and Asia markets had relatively large vehicle export increment, with Mexico, Belgium, Saudi Arabia and other places taking the majority. In the month of October, the markets in Chile and Bangladesh declined significantly, while the markets in Mexico and the Philippines performed relatively well, and Belgium became the key market for growth.

Which car companies are popular?

According to the data released by the China Automobile Association, in the first 10 months of this year, among the top 10 Chinese enterprises exporting complete vehicles, SAIC exported 684000 vehicles, ranking first, and Chery and Chang'an also exported more than 200000 vehicles in the same period; In terms of growth, Geely's export volume was 160000 vehicles in the same period, an increase of 86% year on year, with the most obvious growth rate. Among the unlisted auto companies, BYD had an amazing performance.

"It can be seen that the export territory of Chinese cars has gradually expanded from the traditional African and Middle East markets to the North American and European markets; the products have been upgraded from the low-end models in the past to high-end cars, and can meet the global diversified market demand in terms of appearance quality, internal technical quality and brand marketing ability." Cui Dongshu said.

Exports of new energy vehicles performed well

According to the data of the International Automobile Manufacturers Association, 20 years ago, the world's automobile export volume was 22.1 million, Germany and Japan's automobile export volume exceeded one million, while China's automobile export volume was only 43100. Xu Haidong said that in the past 10 years, China's automobile export volume has been fluctuating around 1 million vehicles, but last year, the automobile export exceeded 2 million vehicles, doubled, and increased by more than 50% in the first 10 months of this year.

Why are Chinese cars favored by foreign consumers?

Xu Haidong analyzed that in the short term, there are two reasons. First, the overseas market is gradually recovering and the overall environment is getting better; Second, China's supply chain is more complete than overseas automobile supply chain, which is also a good opportunity for domestic automobile to develop overseas markets. In the long run, first of all, the competitiveness of China's automobile products has increased significantly. "We have not only improved our design ability, but also paid great attention to customer experience. We have done a very good job in product design, quality control and management, technology innovation and integration capabilities have been greatly improved, and the service system is also innovating," said Xu Haidong.

Secondly, overseas export models are increasingly diversified. Chinese auto enterprises have expanded from the past vehicle trade to local factory building, cross-border brand cooperation, self-built sales channels, customized development of shared technology and other ways. Many Chinese enterprises have established a supply chain system of automobile industry chain facing the global market, such as R&D, marketing, logistics, parts, manufacturing, finance and second-hand cars, which has laid a solid foundation for the overseas development of Chinese automobile enterprises.

Thirdly, Chinese automobile enterprises pay more and more attention to brand building. Product price is the direct reflection of brand premium power. Xu Haidong said that from the perspective of the average price of China's automobile exports, the average price in 2018 was $12900, and then gradually increased to $16400 this year, reaching $18900 in August. Among them, the average price of pure electric vehicles increased more significantly, reaching US $25800 in August.

In addition, the outstanding performance of new energy vehicles has become an important force to drive high-quality export growth.

"By the end of October, the overseas sales of Great Wall Motors had exceeded 130000 vehicles this year, an increase of 18.55% year on year. Especially, electric vehicles have become a new growth pole for our exports." Fu Xiaokang, vice president of Great Wall Motors Co., Ltd., said that Great Wall's footprint covers Europe, ASEAN, the Middle East, South America, Oceania, South Africa and other markets, and the company has also established full-process vehicle production bases in Thailand and Brazil, The global R&D system is gradually advancing.

The European market has become a major new export destination for many Chinese-made electric vehicles. According to customs data, in the first half of 2022, the Western European market accounted for 34% of the exports of new energy passenger vehicles, of which Belgium was the country with the largest number of new energy vehicles imported from China in the first half of the year.

Since this year, China's major ports have witnessed the accelerated "sailing" of China's electric vehicles and related industrial chains: in the first three quarters, Tianjin's export of electric vehicles increased by 667.7% year-on-year; The export of electric passenger cars at Ningbo Port surged 12.3 times; The total export of electric passenger cars, lithium batteries and solar cells in Shanghai increased by 143.3%

"China's production and sales of new energy vehicles have ranked the first in the world for many years in a row, entering a period of comprehensive market-oriented expansion," said Cui Dongshu, "The great changes that have taken place in China's automobile manufacturing industry in the past 20 years, from the market in the era of traditional fuel vehicles to the 'introduction' of technology, to the 'going out' of new energy vehicles, mean the new rise of China's high-end manufacturing industry. In the future, with the continuous maturity of new energy vehicle technology, domestic automobile enterprises represented by BYD, SAIC, Geely, Great Wall, Chery, etc. will further change the original international automobile market pattern 。”

"I believe that the auto market will also stabilize next year"

After the rapid growth of automobile exports, how can the automobile industry really "go out"?

Many experts believe that the simple "going out" is no longer suitable for the needs of market development at this stage. We must explore a more in-depth and broad "going out" model that breaks through trade barriers between countries and is more international as soon as possible. "In the past, the mode of vehicle export was mainly used, and there would be a clear ceiling in sales." Guan Mingyu, global managing partner of McKinsey and head of McKinsey's automobile business in Greater China, said, "Foreign trade export is switching from a single mode to a variety of modes, such as building factories overseas, such as purchasing brands overseas, and even bringing the entire Chinese brand abroad." Guan Mingyu suggested, Chinese automobile enterprises and parts enterprises need to find ways to join forces and explore overseas markets together.

In the eyes of consumers, Chinese auto brands still have great potential in overseas markets. "When I search for 'China brand car' or 'Made in China car in Malaysia' online, I can find the most relevant news about the entry of Chinese cars into the market, rather than the official purchase entrance of brands in Malaysia, such as the official brand website." Li Peizhen said, "In this way, there is still a lot of room for development of Chinese cars in the Malaysian market."

How do you see the trend of automobile export?

"With the improvement of the competitiveness of China's automobile products, Chinese automobile enterprises have begun to go abroad with great confidence. From the brand to the whole system, China's automobile export has entered a new stage." In Xu Haidong's view, the above factors will also support the long-term growth of China's automobile export in the future.

Recently, the Ministry of Industry and Information Technology and other three departments jointly issued the Notice on Consolidating the Upward Trend and Energizing the Industrial Economy, and put forward 17 specific measures. Among them, it is clear to further expand automobile consumption, implement preferential policies such as halving the purchase tax on passenger cars with 2.0L and below displacement, and extending the purchase tax exemption for new energy vehicles, and launch the pilot project of comprehensive electric city of public vehicles.

Xu Haidong believes that with the implementation of the 17 policies and measures mentioned above, he believes that the auto market will stabilize in the fourth quarter and next year. He predicted that in the future, China's overseas production of cars will reach about 10 million, and its domestic production and export will reach about 5 million. The time to achieve this goal is about 2031. "The basis for achieving this goal is to improve the competitiveness of domestic cars, build brands and increase long-term direct investment," said Xu Haidong.