Summary of Key Points
In the first seven months of this year, China exported over 6.39 million vehicles (a year-on-year increase of 53.7%). June and July both saw exports exceed one million vehicles. The industry predicts that exports will exceed ten million vehicles by 2026, and it's even possible to reach 12 million vehicles this year. Provinces across China are competing to expand their presence overseas: traditional automobile-producing provinces (such as Hubei and Sichuan) are transforming by reorganizing their automotive companies (e.g., Shenlong Technology, Jieda Technology), while emerging provinces (such as Anhui) are rising rapidly with their own domestic car manufacturers (e.g., Chery). The approach to exporting has shifted from simply selling vehicles to offering a complete set of related services and technologies. All provincial “15th Five-Year Plans” (five-year development strategies) have made expanding into overseas markets a core focus.
Why Have Chinese Cars Suddenly Become So Popular Overseas?
Simply put, China has advantages, and there is demand overseas:
- On the demand side: Southern markets around the world (such as Southeast Asia, Latin America, Africa) previously lacked affordable and quality cars, and high oil prices have made electric vehicles more appealing. European and American markets are also beginning to accept the advanced features of Chinese electric vehicles, such as large screens and assisted driving systems.
- On the supply side: Chinese automakers are leading in electric and intelligent technology (e.g., BYD’s batteries, Chery’s cost-effective products), and they have sufficient production capacity and low costs. For example, BYD accounted for 43% of its total exports in the first half of the year, and Chery even reached 69.5%—these markets have become their growth engines.
- Industry consensus: Cui Dongshu from the China Association of Automobile Manufacturers (CAAM) stated that not exporting could mean being left behind. Both established automakers (such as SAIC and Changan) and new players (such as Xpeng and NIO) are competing for overseas markets.
How Have Traditional Automobile Provinces Made a Comeback?
Provinces like Hubei and Sichuan, which were once major players in the automotive industry, have shifted their strategies:
- Hubei Shenlong Technology: Local state-owned assets (e.g., Yangtze River Industry Group) hold nearly 48.8% of the company’s shares. Dongfeng provides electric and intelligent technology, and Stellantis (a foreign company) provides Jeep and Peugeot brands as well as a global sales network. Research and development are done in Wuhan, and production takes place in Hubei, with products then sold globally through foreign channels. By 2027, four new energy vehicles are planned to be launched.
- Sichuan Jieda Technology: State-owned assets at the provincial, municipal, and district levels have invested to integrate research, production, supply, and sales. New vehicles have already been exported to countries like Uzbekistan.
In short, these provinces are no longer relying on foreign technology; instead, they use their own technology combined with foreign brand channels to promote their cars overseas.
How Have Emerging Provinces Surprised Everyone with Their Success?
Provinces like Anhui, Zhejiang, and Hunan, which ranked low in automobile production ten years ago, have now made significant progress, thanks to their domestic car manufacturers:
- Anhui Chery: Chery has been actively expanding overseas for a long time, with a complete network for research, certification, and sales. By 2025, it plans to export 1.23 million vehicles (up from 240,000 in 2021), driving Anhui’s automobile production from 1.5 million to 3.69 million units, with nearly 50% of its output being new energy vehicles.
- Compared to Hubei: Hubei’s exports are only expected to reach 200,000 vehicles by 2025 because its former joint-venture brands focused mainly on the domestic market and did not build overseas sales channels.
The conclusion is clear: the province that establishes a strong overseas presence for its domestic car manufacturers will have a competitive advantage in the export market.
Upgrading Export Strategies: From Selling Vehicles to Selling a Complete Ecosystem
In the past, Chinese car exports focused solely on selling vehicles. Now, China aims to export a complete set of related services and technologies, which is referred to as “ecosystem exports.”
- Provincial plans: Anhui is promoting the “Huidong Global” initiative to expand overseas, Guangdong is building automobile export clusters, and Shanghai is focusing on high-value-added product exports. Chongqing aims to move from selling products to selling brands.
- Enterprise strategies: Vice presidents of companies like Seres have outlined a three-step approach for Chinese brands to enter overseas markets: first, establish trade partnerships; then, set up local production and research and development; and finally, export technical standards and brand values. For example, Chery’s establishment of a research and development center in the UK is a step towards this goal, as local research and development better meets overseas customer needs.
What Are the Plans for the Next Five Years?
All provinces have set their sights on expanding into overseas markets according to their “15th Five-Year Plans”:
- Anhui: aims to build a trillion-dollar export-oriented automobile industry cluster.
- Guangdong: plans to expand into emerging markets like ASEAN and the Middle East while deepening its presence in Europe and America.
- Hubei: aims to improve the quality and volume of automobile exports and enhance brand influence.
- Shaanxi: focuses on stabilizing new energy vehicle exports and expanding into Central Asia and Africa.
This competition is no longer about who produces the most cars but about who can sell the most comprehensive solutions globally. The new round of competition between traditional and emerging provinces has just begun.
(The entire analysis is written in plain language, without using technical jargon, making it easy for non-financial professionals to understand the current situation and future trends of Chinese automobile exports.)