The Korea Automobile Manufacturers Association announced on the 25th the report titled “Export Status and Implications of China’s Automobile Global Market in 2022.”
According to the report, in 2022, China’s automobile exports increased by 54.4% compared to the previous year, reaching 3.11 million units, thereby surpassing Germany’s 2.61 million units to become the second-largest automobile exporting country in the world. Among China’s export volume, new energy vehicles (BEV, PHEV, FCEV) accounted for about 680,000 units, which marked a 120% increase from the previous year, doubling the numbers.
Japan secured the top spot in exports by shipping approximately 3.2 million units by November 2022, while South Korea is expected to rank sixth with a provisional figure of 2.3 million units.
China’s automobile exports had remained around the 1 million units level for the past five years; however, following an over 100% surge in 2021, the growth trend continues. About half of China’s electric vehicle exports are from Tesla’s Shanghai factory, which exported 97,182 units in the first half of 2022, making up 48% of China’s exports of new energy vehicles totaling 202,000 units in the same period.
As of May 2022, seven out of the top ten electric vehicle models sold worldwide were produced by Chinese companies such as BYD and SAIC, indicating the ongoing growth of China’s complete vehicle exports.
Historically, China’s automobile exports focused on countries with low per capita income or politically aligned regions, such as Russia, Iran, and Latin America. However, recent strides have been made, especially with new energy vehicles, to expand into the European market while increasing market share in existing markets backed by improved product quality.
Previously targeting countries like Iran, India, Vietnam, the U.S., and Egypt, China has diversified its export destinations in 2022 to include Belgium, Chile, Australia, the UK, and Saudi Arabia.
The average export price of Chinese automobiles was $12,900 in 2018, but by 2022, this has risen by about 30% to $16,400, reflecting a trend towards higher value-added products.
According to Chinese customs, electric vehicles heading to European countries make up 70% of exports. Moreover, the trend of Chinese companies expanding exports to meet demand not only for electric passenger cars but also for medium and large commercial electric vehicles continues.
In South Korea, the market share of Chinese electric buses has reached 50%, with BYD and Yutong Bus holding a 30.4% share of the electric bus market in Europe.
Following the Russia-Ukraine war, Chinese automakers (Haval, Geely, Chery) have stepped in to fill the void left by global manufacturers from South Korea, Japan, and Europe, increasing their market share in Russia to 31% from January to November 2022. In Saudi Arabia, three out of the top ten selling brands are Chinese (Geely, Changan, MG).
China is actively expanding exports to major targeted countries with established FTAs. To enhance South Korea’s export competitiveness and develop new markets, early agreements on FTAs with high-growth potential markets such as the Middle East and Latin America are necessary.
China has signed FTAs with countries like ASEAN (effective July 2005), Chile (October 2006), Peru (March 2010), and Australia (December 2015) to promote exports to these countries.
South Korea has also established FTAs with major export destinations, including Chile (April 2004), ASEAN (June 2007), the EU (July 2011), Peru (August 2011), Australia (December 2014), and the UK (January 2021).
The President of the Korea Automobile Manufacturers Association, Kang Nam-hoon, stated, “Half of China’s electric vehicle exports are Tesla’s,” emphasizing the urgent need for comprehensive incentive policies to attract domestic electric vehicle production facilities and expand investments by foreign companies, such as GM Korea and Renault Korea. Furthermore, he added that enhancing domestic automotive industry’s production base and competitiveness is essential through quick enactment of the ‘Future Car Special Act’ and securing labor flexibility, to bolster South Korea’s automotive export competitiveness.
Lee Sang-jin daedusj@autodiary.kr