· China recently reported exports of more than 5 million vehicles in 2023, topping Japan to become the top country for car exports in the world.
· Rising volume from Chinse automakers like SAIC, Dongfeng and BYD comes amid declining U.S. vehicle exports as companies like General Motors have cut international operations.
· Chinese companies are releasing new models in record times, and many are producing EVs efficiently and profitably.
Chinese automakers pose a growing threat to their American counterparts — even without selling directly to consumers in the U.S. market.
Sales of China-made vehicles are rising at notable rates in Asia, Europe and other countries outside those continents. China recently reported exports of more than 5 million vehicles in 2023, topping Japan to become the top country for car exports in the world.
That volume from well-established, government-owned companies like SAIC and Dongfeng, as well as newer players like BYD, Nio and others, has catapulted China from the sixth ranking to the top seed since 2020. It comes amid declining U.S. vehicle exports as companies such as General Motorshave cut international operations. U.S. auto exports in 2022, the most recent data available, were down 25% from their peak in 2016, according to the U.S. Bureau of Economic Analysis.
America — fourth globally in vehicle exports prior to 2020 — ranked sixth in the world last year, falling behind No. 5 Mexico, No. 4 South Korea and No. 3 Germany, according to global consulting firm AlixPartners.
“My No. 1 competitor is the Chinese carmakers,” said Carlos Tavares, CEO of Chrysler parent Stellantis, during a virtual media roundtable Friday. “This is going to be a big fight. There is no other way for a global carmaker like Stellantis that is operating all over the world than to go head-on with the Chinese carmakers. There is no other way.”
The threat extends beyond export volumes. Chinese automakers have set a new standard for vehicle production and pricing. They’re releasing new models in record times, and many are producing EVs efficiently and profitably — something that has eluded global automakers including America’s GM and Ford Motor.
Growth gone global
Backed by local and federal governments, the growth of Chinese automakers began in their home country — taking share away from mandatory joint ventures between non-domestic automakers and Chinese companies.
For example, GM’s share of the Chinese market, including its joint ventures, has plummeted from roughly 15% in 2015 to 8.6% at the end of the third quarter last year.
“What’s going on in China at home? These [new energy vehicle] brands have become dominant,” Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners, said at the Chicago Fed’s auto conference. “They were 26% [market share] a few years ago, up to more than 50% in 2022 and headed towards two-thirds by the end of the decade.”
Chinese companies accounted for 8% of Europe’s all-electric vehicle sales as of September last year and could increase their share to 15% by 2025, according to the European Union. The EU believes Chinese EVs are undercutting the prices of local models by about 20% in the European market.
American companies, such as GM and Ford already, or plan to, manufacture some vehicles in China to be imported and sold in the U.S. GM imports its Buick Envision from China to the U.S., while Ford last year said it would import its forthcoming Lincoln Nautilus crossover from China.
But as of yet, a U.S. driver can’t easily buy a Dongfeng, BYD or other Chinese-made vehicle stateside. Aside from potential regulatory hurdles and protectionism acts, some believe Chinese automakers could find success in expanding to the U.S. market the same way Japan’s Toyota Motor and South Korea’s Hyundai Motor have done.
Those automakers made their entrances to the U.S. market with affordable, accessible vehicles, then increased their offerings to boost quality and safety and ultimately expanded to higher-end models.
“The Japanese carmakers came to the U.S. in the ’70s,” Stellantis’ Tavares said. “They needed 50 years to reach the top of the market with some of the competitors that we know well. I don’t see any reason why this would not happen with the Chinese.”
