It is estimated that by 2024, China's own brand passenger car exports will reach 4.5 million units

China’s own-brand passenger car exports are forecast to reach 2.5 million in the second half of 2024, bringing the total for 2024 to 4.5 million, a 29% increase. EU tariffs and a decline in demand for electric vehicles are slowing the growth of China’s pure electric vehicle (BEV) exports to 9% (860,000 units).

As a result, the share of BEV exports will fall from 22.5% in 2023 to 19.0% in 2024. The export share of plug-in hybrid and hybrid electric vehicles (PHEV and HEV) will exceed 10% for the first time in three years, reaching 310,000 and 240,000 units, respectively. Latin America and Europe are key regions driving the growth of Chinese-branded plug-in hybrid and hybrid exports.

Exports of internal combustion engine (ICE) passenger vehicles are expected to remain strong, growing at 24% in 2024, with exports reaching 3.1 million units. Chinese automobile manufacturers (OEMs) have shown significant improvements in the competitiveness of internal combustion engine vehicles.

"This development has helped MG, Chery and Great Wall Motors - the top three exporters of internal combustion engine vehicles - to succeed in overseas markets. It is worth noting that Chery and Great Wall Motors have seized the opportunity to fill the gap of those who have withdrawn from the Russian market. The gap left by international brands. Dongfeng Motor and Guangzhou Automobile Group are rising Chinese automakers that have accelerated their global expansion and are expected to quadruple and triple their exports respectively. In 2024, its export volume will account for up to 10% of China's total export volume of independent brands," said senior analyst Liu Aiwen.

China’s own-brand passenger car exports are estimated to rise 27% to 3.1 million units in the first to third quarters of 2024. Europe is the only region to see a decline in exports, down 4%, as the European Union raises tariffs on Chinese electric vehicles. As exports to other regions increase, the European Union drops from China’s largest auto export market in 2023 to the fourth largest in 2024.

Despite the decline in exports and weaker demand for electric vehicles, the European Union still has the largest share of China’s electric vehicle exports, at 28.4%. "Reduced demand for electric vehicles in Europe and political uncertainty have slowed down Chinese OEMs' (original equipment manufacturers) investment in the region," said Liu. "However, Europe remains a core market for Chinese OEMs to advance their globalization. Chinese OEMs are rapidly expanding their product lines by launching hybrid electric vehicles (HEVs) to circumvent tariffs and meet local consumer demand for more fuel-efficient vehicles. SAIC is a clear example - it has launched hybrid versions of the MG 3 and MG ZS models to challenge the position of Japanese brands' HEVs in Europe."

Despite rapid export growth, Chinese automakers still face many uncertainties in the global market. For some automakers, weak channel and product localization capabilities have led to significant differences in their sales performance and inventory levels in various overseas markets. "Channel management and localization capabilities are critical for Chinese automakers as they face export restrictions as they explore local production and integrate into the local supply chain ecosystem," said Liu.

Chinese automakers (OEMs) have taken a global lead in electrification and software-defined vehicle (SDV) technologies. However, their competitive advantage in advanced driver assistance systems (ADAS) and digital cockpit technologies has not yet fully emerged. Chinese automakers should take a pragmatic approach to the export market and carefully evaluate the feasibility of replicating their success in the Chinese market globally. Although Japanese and Korean automakers are losing market share in China, their globalization strategies remain strong and competitive, posing a threat to Chinese OEMs.