BEIJING (AP) — China’s auto exports are set to surge 63.7% in 2023, while year-end incentives boosted domestic sales by 4.2%, an industry association said Thursday.Thank you for reading this post, don't forget to subscribe!
Chinese automakers have aggressively expanded exports in a bid to make up for missing growth domestically as China’s economy slows. He has also emphasized electric vehicles as government subsidies have turned China into the world’s largest EV market, even as car sales have stagnated overall.
Auto sales in China last year totaled 21.9 million cars, while exports rose to 4.1 million, the China Association of Automobile Manufacturers reported. Domestic sales have fallen from a peak of nearly 24 million in 2017.
With the increase in exports, China can overtake Japan and become the world’s number one car exporter. Japan exported 3.6 million cars in the first 11 months of the year, with the final count expected on Jan. 31.
An explosion in sales to Russia helped boost China’s exports in 2023 as European and Japanese manufacturers pulled back due to the war in Ukraine. China exported 840,000 vehicles to Russia in the first 11 months of last year, including trucks and buses as well as cars.
The China Passenger Car Association said earlier this week that demand in Russia and neighboring countries is slowing and future export growth will depend on the expansion of EV sales overseas. Chinese EV makers have targeted other markets, including Southeast Asia, Europe and Australia.
The manufacturers’ association does not provide a breakdown for electric vehicles, but data released by the Passenger Car Association shows electric vehicles will account for 24% of new car sales in China in 2023, up from 12% in 2021. Including hybrids, the share of new energy vehicles in total sales last year reached 36%.
According to the passenger car group, the Tesla Model Y was the best-selling electric vehicle in China last year with 646,800 units sold, followed by the BYD Song sedan with 428,600 units.
According to the Tesla website, the Model
Bill Russo, founder of an automobility consultancy in Shanghai, said Chinese companies have democratized electric vehicles by lowering their prices. The next challenge will be to convince buyers that an EV can meet their driving needs. But the first step is to make it available at a price they can consider, Russo said.
“This is the paradigm that the Chinese have broken, that you can make EVs affordable,” he said in a recent interview. “What China is doing with EVs is using its domestic market to generate economies of scale that it can take internationally.”
Fitch Ratings said in a report last month that it expects the share of new energy vehicles, including hybrids, in China’s total sales in 2024 to rise to 42%-45%. It is also estimated that exports will increase by 20% to 30% this year.
Concerned over rising imports from China, the EU last year launched a trade investigation into Chinese subsidies for electric vehicles. Investigation is ongoing.
Total sales of all vehicles including trucks and buses at home and abroad are set to reach the 30 million-unit milestone in 2023, up 12% from the previous year, the Chinese Manufacturers Association said. He estimates that this year the growth rate will slow down to around 3%.
Ken Moritsugu, The Associated Press