The world’s largest automobile exporter will now be China…

Chinese automakers are preparing to dominate the global market. China may become the world’s largest auto exporter this year, surpassing Japan due to overproduction and a slowdown in the domestic market.

European, American, Japanese and South Korean automotive groups are losing decades of market dominance to China. China is preparing to become the world’s largest automobile exporter this year, surpassing Japan.

Overproduction in China and the supply-demand imbalance within the country began to direct companies in the country to foreign markets.

Chinese manufacturers, including electric vehicle market leader BYD, now outsell foreign automakers and are targeting overseas markets for growth.

Bill Russo, former president of US Chrysler in China and founder of Automobility consultancy firm, said that there is a “tremendous overcapacity” in the number of vehicles produced in factories across the country. “We have a surplus of 25 million units unused,” Russo said.

Additionally, data from Automobility shows that sales volumes in China have declined after peaking in 2017, in line with the slowdown in the country’s middle class growth and economic weakness.

The overcapacity problem affects both local companies such as Chery, SAIC, BYD, Geely and Changan, and a growing number of foreign groups. Companies such as Tesla, Ford, Nissan and Hyundai are among those repositioning their Chinese factories towards export markets.

On the other hand, years of supportive industrial policy and private sector investments have also increased China’s competitiveness in the automotive industry. According to Moody’s data, China’s annual vehicle exports, which surpassed South Korea in 2021 and Germany in 2022, are on track to surpass Japan this year.

As of the end of July 2023, 2.8 million vehicles were exported from China in the first 7 months, an increase of 74 percent compared to the previous year. 1.8 million of these were gasoline-powered vehicles. Analysts expect China to maintain its top spot for years to come.

According to the estimates of the consultancy company AlixPartners, overseas sales of cars produced by Chinese companies will reach 9 million by the end of 2030, and their global market share, which is currently 16 percent, will increase to 30 percent.