Trade and viruses are global.
China exported 680,000 Passenger Cars in both 2018 and 2019, says Alan Kang, Senior Market Analyst at LMC Automotive Consultancy. “If we compare this volume with total domestic production of 21 million units last year, there is no denying the limited scale of Chinese vehicle exports, at just 3% of total output in 2019,” he observes.
“The data for 2010 and 2016 show that overseas OEMs accounted for just 11% and 19% of China’s exports, respectively.”
Although export volumes were stable in the last two years, the sector has experienced significant structural shifts. In 2019, non-Chinese brands accounted for 38% of the export market, compared with 30% in 2018. Data for 2010 and 2016 show that overseas OEMs accounted for just 11% and 19% of China’s exports, respectively. These figures, says LMC, indicate the growing proportion of vehicles built in China by foreign automakers being shipped overseas.
Some brands, of course, already have a long-established history of exporting from China. GM has been shipping Chevrolet, Buick and Cadillac products from China to the US market for years. Volvo uses it Chengdu and Daqing plants as export bases for global markets.
For other OEMs exporting vehicles from China may be a matter of necessity rather than choice. Kia, whose sales in 2019 plunged by 20% to 300,000 units, leaving a vast proportion of its local production capacity of 730,000 units un-utilized. The Korean automaker soon put the idle capacity to use and shipped 50,000 units of locally built vehicles to overseas markets last year.
Forcing Automakers to Manufacture NEVs
The implementation of CAFC regulations and the New Energy Vehicle (NEV) dual-credit policy in April 2018 had an important impact on the operational and production activity of automotive enterprises in China.
“The new measures effectively forced automakers to manufacture a certain volume of NEVs in order to qualify for the mandatory number of credits. As these policies were being rolled out, the government simultaneously lifted the industry’s foreign equity restrictions, thus allowing overseas companies to operate more freely,” said Kang.
When combined with China’s relatively low labor costs and mature industrial chain, the effect of these changes is to encourage foreign OEMs to invest greater resources in China, thus boosting NEV manufacturing. But not all of the output volume was destined for local sales as OEMs soon recognized the advantages of exporting these vehicles to markets beyond China.
The impact of increasing trade protectionism is also forcing in overseas companies to set up manufacturing bases in China. “It appears that the way is being paved for China to be become a global export base for international auto brands by 2025,” concludes Kang.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
China – Future Export Base for Global Markets?
Trade and viruses are global.
China exported 680,000 Passenger Cars in both 2018 and 2019, says Alan Kang, Senior Market Analyst at LMC Automotive Consultancy. “If we compare this volume with total domestic production of 21 million units last year, there is no denying the limited scale of Chinese vehicle exports, at just 3% of total output in 2019,” he observes.
“The data for 2010 and 2016 show that overseas OEMs accounted for just 11% and 19% of China’s exports, respectively.”
Although export volumes were stable in the last two years, the sector has experienced significant structural shifts. In 2019, non-Chinese brands accounted for 38% of the export market, compared with 30% in 2018. Data for 2010 and 2016 show that overseas OEMs accounted for just 11% and 19% of China’s exports, respectively. These figures, says LMC, indicate the growing proportion of vehicles built in China by foreign automakers being shipped overseas.
Some brands, of course, already have a long-established history of exporting from China. GM has been shipping Chevrolet, Buick and Cadillac products from China to the US market for years. Volvo uses it Chengdu and Daqing plants as export bases for global markets.
For other OEMs exporting vehicles from China may be a matter of necessity rather than choice. Kia, whose sales in 2019 plunged by 20% to 300,000 units, leaving a vast proportion of its local production capacity of 730,000 units un-utilized. The Korean automaker soon put the idle capacity to use and shipped 50,000 units of locally built vehicles to overseas markets last year.
Forcing Automakers to Manufacture NEVs
The implementation of CAFC regulations and the New Energy Vehicle (NEV) dual-credit policy in April 2018 had an important impact on the operational and production activity of automotive enterprises in China.
“The new measures effectively forced automakers to manufacture a certain volume of NEVs in order to qualify for the mandatory number of credits. As these policies were being rolled out, the government simultaneously lifted the industry’s foreign equity restrictions, thus allowing overseas companies to operate more freely,” said Kang.
When combined with China’s relatively low labor costs and mature industrial chain, the effect of these changes is to encourage foreign OEMs to invest greater resources in China, thus boosting NEV manufacturing. But not all of the output volume was destined for local sales as OEMs soon recognized the advantages of exporting these vehicles to markets beyond China.
The impact of increasing trade protectionism is also forcing in overseas companies to set up manufacturing bases in China. “It appears that the way is being paved for China to be become a global export base for international auto brands by 2025,” concludes Kang.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.