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Chinese carmakers set sights overseas

Domestic marques plan to increase exports and set up foreign factories

By CAO YINGYING | China Daily | Updated: 2025-03-03 10:32
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IM Motor's IM6 models await shipment to Thailand from Shanghai Haitong International Automotive Terminal on Feb 23. [CHINA DAILY]

Chinese automakers are ramping up efforts to ship vehicles overseas, exploring growth while navigating uncertainties and policy changes in the global automotive market.

The new energy vehicle startup Xpeng shipped the first batch of 300 right-hand drive X9 MPVs overseas on Feb 22. The vehicles will mainly be sent to the Southeast Asian market, with Thailand a key destination.

Xpeng is the first startup to achieve deliveries of more than 10,000 vehicles in Europe and has topped the sales charts among NEV startups in markets such as the Netherlands, Denmark and Norway.

CEO He Xiaopeng said that the company aims to cover 60 countries and regions, and set up more than 300 overseas service centers by 2025; rank among the top three in Chinese auto exports by 2027; and achieve half its sales from overseas by 2033.

"Xpeng will also bring China's powerful intelligent driving to the global market. We hope that when overseas car owners first encounter Chinese NEVs, they will be impressed by the 'intelligent and technological leadership' rather than just a monotonous and joyless vehicle," He said.

A day after the Xpeng shipment, SAIC Motor's NEV marque IM Motor dispatched the overseas version of its LS6 from Shanghai to Thailand. It is scheduled for launch at the Bangkok International Motor Show on March 24.

The model, named IM6 in overseas markets, has been optimized for the Thai market, said the automaker.

Since China replaced Japan to become the biggest automobile exporter in 2023, the sector has emerged as a highlight with Chinese automakers showing an impressive performance in overseas markets.

The latest data from the China Association of Automobile Manufacturers shows that China exported 470,000 vehicles in January, up 6.1 percent year-on-year. Among them, 320,000 were fuel vehicles, a 6.6 percent decrease year-on-year. Meanwhile, 150,000 were NEVs, a significant 49.6 percent increase compared with last January.

Among the top 10 exporters, Chery was No 1 with 81,000 vehicles exported, accounting for 17.2 percent of the country's total. BYD had the most growth in exports, with 70,000 vehicles shipped, reflecting a 91.5 percent year-on-year increase. Changan, SAIC and Great Wall Motors followed in export performance.

Xu Changming, deputy director of the State Information Center, said that Chinese automakers excelling in overseas markets can be attributed to the improved product quality being recognized by foreign consumers, increased NEV exports, and intensified domestic market competition prompting greater export efforts.

He added that the growth was fueled by high international demand and started from a low base, while overseas markets now seek local production alongside exports. And challenges like the European Union's anti-subsidy probes and Russian car scrappage taxes are putting pressure on exports, urging a strategy shift to blend exports with local manufacturing for sustained progress.

Top exporters are following suit. The latest is that Chery announced the establishment of a smart auto industrial park in Selangor, Malaysia, on Feb 23. The park, scheduled for completion in 2026, will initially have an annual production capacity of 100,000 vehicles, with plans to expand to 300,000 vehicles.

The remaining land will be available for use by parts suppliers and could be used to construct training centers and research and development facilities, according to Chery.

Chery has operated a vehicle assembly plant in Malaysia, which produces the locally sold Jaecoo J7 and Omoda C9 SUVs.

In January, Changan and Geely announced their plans to establish factories overseas too.

Despite the positive start in January for China's automobile exports, the CAAM anticipates a slowdown in growth for 2025 with exports reaching around 6.2 million vehicles, a 5.8 percent year-on-year increase.

Xu Haidong, deputy secretary-general of the CAAM, explained that in 2025, China's automobile exports will face significant pressures and market changes. These include increased external pressures such as tariffs imposed by the EU.

Consultancy McKinsey & Company shared a similar perspective in a report that the growth of China's vehicle exports will slow down and dip into single digits in 2025.

Vehicle exports increased 19.3 percent to 5.86 million units in 2024. McKinsey noted that the growth rate marked the lowest since 2021, with the first annual increase below 1 million units since then.

Nevertheless, McKinsey remained optimistic about the upward trajectory of Chinese automobile exports. Besides growing recognition for electric and smart technologies among overseas customers, McKinsey highlighted the growth potential of plug-in hybrid vehicles, including range-extended models, which currently represent just 6 percent of exports from China.

McKinsey found that only about 15 percent of Chinese vehicle exports come from joint ventures in China. To maintain good capacity in their Chinese factories, international automakers are expected to accelerate exports.

Xu Changming also suggested that businesses should tailor their strategies to different regional markets. In Europe, Chinese automakers should focus on high-quality products, and in developing countries, emphasize cost-effectiveness.

Additionally, they should aim to dominate key markets while cultivating emerging ones like Africa for future growth opportunities, Xu said.

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