China Is About To Become The Number 2 Exporter Of Passenger Vehicles In The World
It's bad enough the U.S. relies on China's productivity for...well, just about everything...but now it appears we've also missed the fact that China is reportedly taking over the global automotive industry with their vehicles.
That is, at least according to a new report by Bloomberg, who notes that China is on the verge of becoming the No. 2 exporter of passenger vehicles worldwide, passing both the U.S. and South Korea.
Overseas shipments of vehicles manufactured in China were up 3x since 2020 to 2.5 million vehicles last year according to China Passenger Car Association data. In the Middle East and Latin America, Chinese brands have become "market leaders", Bloomberg writes.
These vehicles include Chinese-made Tesla, as well as Chinese owned names like Volvo and MG. Home grown automobile companies like Nio and BYD are also on the global come-up, both targeting a global audience as worldwide EV adoption continues.
“Part of this is just Chinese companies are getting better, but some of it is overcapacity in China. This is going to be a pain point. It could generate a really strong reaction in Europe in terms of trade protections,” said Agatha Kratz, a director at Rhodium Group.
And China targets selling 8 million passenger vehicles overseas by 2030, according to Xu Haidong, deputy chief engineer at the state-backed China Association of Automobile Manufacturers. This marks nearly twice Japan's current shipments.
Mercedes-Benz Group AG Chief Executive Officer Ola Kallenius said back in October: “We have to have them on the radar screen, without counting out the usual suspects. The competitive intensity is increasing. It’s the most fun time to work in automotive since 1886, but it’s also the most uncertain time.”
Stellantis NV CEO Carlos Tavares commented last month: “To fight the Chinese, we will have to have comparable cost structures. Alternatively, Europe will have to decide to close its borders at least partially to Chinese rivals. If Europe doesn’t want to put itself in this position, we need to work harder on the competitiveness of what we do.”
One UK car buyer chose a Chinese-made Polestar over a Tesla or Porsche. He told Bloomberg: “It turns a lot of heads, partly due to its color, partly due to people not knowing what it is. I did have some concerns that the build quality may not be the best. Upon test driving, any doubt of quality issues was put to rest.”
Alexander Klose, executive vice president for overseas operations at Aiways Automobiles Co. concluded: “The switch to battery means the motor is no longer a differentiator. It’s created a level playing field.”