China overtakes Japan as the world's top car exporter in Q1 2023
According to official data from both countries, China has surpassed Japan as the world's largest exporter of automobiles in the first quarter of 2023. This is a historic milestone for China, rapidly expanding its global market share in the automotive industry.
According to the China Association of Automobile Manufacturers (CAAM), China exported 1.07 million vehicles in the first three months of the year, up 58% compared to the same period in 2022. On the other hand, Japan exported 954,185 vehicles in the same period, up 6% from a year earlier. This means that China exported about 116,000 more vehicles than Japan, making it the top car exporter in the world.
One of the main drivers of China's car export growth is the increasing demand for electric vehicles (EVs), which are seen as a key solution to reduce carbon emissions and combat climate change. China is a global leader in EV production and innovation thanks to its strong government support and dominance over the battery supply chain. In the first quarter of 2023, China's exports of new energy vehicles (NEVs), which include EVs, rose by more than 90% year-on-year.
Some of the leading Chinese EV brands that have been expanding overseas include SAIC, which owns the MG brand; BYD, which veteran US investor Warren Buffett backs; and Tesla's China arm, which has a huge manufacturing plant in Shanghai. These brands have been venturing into emerging and Western markets, where competition is rife. For example, SAIC's MG brand sold more than 35,000 units in Europe in 2022, making it one of the fastest-growing brands in the region. BYD has also entered several European markets, such as Norway, Spain, and Germany, with its range of electric cars and buses. Tesla, meanwhile, has been exporting its Model 3 and Model Y vehicles from its Shanghai factory to Japan, Europe, and other regions.
Another factor that has boosted China's car exports is its strong performance in Russia, which has become one of its largest export destinations. Since the start of the Ukraine crisis in 2014, Western countries have imposed trade sanctions on Russia, affecting its automotive industry. As a result, Chinese carmakers have seized the opportunity to fill the gap and increase their market share in Russia. In 2022, Chinese carmakers sold more than 300,000 units in Russia, accounting for about 15% of the total market. Some popular Chinese brands in Russia include Geely, Chery, and Great Wall.
China's rise as a car export powerhouse reflects its ambition to become a global leader in the automotive industry. With its cost, quality, and technological advantages, China is poised to challenge the established players in the international market. However, China also faces challenges and uncertainties, such as trade tensions with some countries, regulatory barriers, consumer preferences, and environmental standards. How China will overcome these obstacles and maintain its momentum remains to be seen.