Car exports from China are reaching record highs. Over 1.36 million vehicles were shipped overseas in the first three quarters, according to the China Association of Automobile Manufacturers (CAAM), around 1.2 times the figure from January to September in 2020 and a 51% rise compared with the same period in pre-Covid 2019. Xu Haidong, CAAM Deputy Chief Engineer, said the surge in exports is related to changes in global vehicle production. GM and Ford are shutting money-losing plants in some Asian countries, including India and Thailand. Chip shortages and the Covid pandemic are forcing carmakers from Toyota to Volkswagen to cut their production as well. Chinese carmakers have also felt the shortage of semiconductors, which contributed to a reduction in combined projections for production of around 2 million units in 2021. However, thanks to effective Covid controls, vehicle supplies from China have held up. In the first nine months, 18.24 million vehicles were made in China, up 7.5% from the same period in 2020, according to the CAAM.
China has become a major producer of Tesla models for global markets, with over 100,000 exported this year. “Due to strong U.S. demand and the optimization of costs on a global scale, we have completed the transition of Gigafactory Shanghai as the primary vehicle export hub,” Tesla said in July. The fundamental reason for the growing popularity of Chinese vehicles is improving quality and service, which enhances their reputation, as well as novel features largely absent in rival products, Xu said. SAIC Motor Corp, China’s largest vehicle-maker by sales, sold over 441,000 vehicles overseas in the first three quarters of this year, up 99.6% from the same period last year. The carmaker expects sales to reach 550,000 units during the whole year. SAIC Motor has set up around 1,000 dealerships and service outlets in some 70 countries and regions. SAIC’s guiding strategy is to offer new and different options, said Yu De, Managing Director of SAIC’s International Business Department. In emerging markets, for example, the carmaker highlights its smart connected vehicles – which can connect to the internet and communicate with other devices – while in developed markets like Europe, new energy vehicles (NEVs) have served as an entry point.
Xu at the CAAM said NEVs are a good way for carmakers to explore the European market. European countries are offering generous subsidies to buyers of new energy vehicles, but most local products are hybrids, which creates a competitive edge for pure electric vehicles that Chinese carmakers excel in. In the first half of this year, SAIC delivered over 12,000 electric vehicles and plug-in hybrids in Europe, accounting for almost 60% of all its sales on the continent. “Our rivals are local European brands. In France, they are Renault, Peugeot and Citroen,” said Liu Xinyu, President of SAIC’s French subsidiary. “Our two models in France have five-star safety ratings and we offer a seven-year warranty, which is the longest in the market,” Liu said.
Maxus, a SAIC subsidiary, sold 5,446 vehicles in Europe in the first half of this year, up 187% from the same period last year. Many of Maxus’ big customers in Europe are delivery firms, including Royal Mail, Irish National Post, DHL and FedEx. The company recently beat Renault and Mercedes, winning an order for 750 units from DPD’s British subsidiary. It was the largest single British order for China-made vehicles. Iceland’s oldest shipping company, Eimskip, also placed orders for Maxus’ vans, which will be the first electric vehicles in its fleet. Harris Automotive, Maxus’ sole agency in the United Kingdom, expects the brand’s sales to at least triple this year in the country.
Other Chinese carmakers such as BYD, Nio and Xpeng have entered European markets as well. In September, BYD shipped over 1,000 electric Tang SUVs to Norway, the country which has seen the quickest growth in electric cars. BYD’s first Norwegian customer, Per Lian, a salesman at a building ventilation company, said Norwegians would have no qualms about buying Chinese cars given the affordable price and good range. “Most important are the prices – if you want to buy a Tesla, it is maybe double,” Lian said in an interview with the Financial Times. Thanks to its vehicle quality and battery technology, BYD is the bestselling NEV maker in China. Last month, it delivered over 70,000 vehicles to Chinese customers, 20,000 more than Tesla.
XPeng started to export its smart electric P7 to Norway in August, after its G3 had made its way to the European market almost a year earlier. One month later, Chinese startup Nio opened its first European showroom in Oslo, Norway, with another four planned in 2022. The first model is its flagship SUV ES8, which rivals products from premium brands such as Audi and Mercedes-Benz. Nio said the second model will be the ET7 sedan, which will arrive in Norway in 2022, “There is real competition in Norway now. Norway is the country with the greatest variety of EV models available,” said Christina Bu, Secretary General of the Norwegian EV Association, as reported by the China Daily.
