By Laura He, CNN
Hong Kong (CNN) — China is sure to have surpassed Japan to become the world’s number one car exporter last year, driven by strong demand in Russia and growing global appetite for electric vehicles (EV), a major industry group has forecast.
The China Passenger Car Association (CPCA) said Tuesday the country is likely to have exported a record 5.26 million vehicles — including passenger cars, buses and trucks — last year, up 56% from 2022, with a total value of $102 billion.
Japan, the current market leader, is expected to have shipped 4.3 million cars over the same period, trailing behind by nearly one million, it estimated.
“It is a certainty that China has become the world’s largest exporter,” the association said on Tuesday.
The CPCA said China’s rapid rise to the top can be attributed to its world-beating EV industry, improved quality of Chinese-made cars and the desire by domestic automakers to seek better profitability abroad and offset cost pressure at home.
Customs data from last month showed China’s car exports totalled 4.76 million units for the first 11 months of 2023. During the same period, Japan’s car exports reached 3.99 million units, according to the Japan Automobile Manufacturers Association.
The rankings will be confirmed once China and Japan’s official annual figures are released. Both are expected in the next few weeks.
Rising Russia sales
During the first 11 months of last year, China’s vehicle shipments to Russia soared 545% to 840,000 units, compared to a year ago, making it the fastest growing market, according to the most recent Chinese customs data.
Chinese carmakers have benefited from the absence of global competitors in Russia, which invaded Ukraine in February 2022, prompting hundreds of global brands to leave.
2023 was a banner year for Chinese EVs, which are cheaper than models built by rivals elsewhere. They have made inroads in Europe, Australia and Southeast Asia.
In 2023, passenger car exports rose 62% from 2022, according to the CPCA. More than a quarter of them were electric, it said. In fact, exports of all EVs — including battery electric vehicles, plug-in hybrids and hydrogen fuel cell vehicles — were up 70%.
In December alone, EV market leader BYD shipped 36,095 vehicles out of China, followed by SAIC’s 19,427 units and Tesla’s (TSLA) 18,334 units.
Chinese car exports took off in 2021, thanks to the country’s surging EV shipments. That year, Tesla designated its Shanghai Gigafactory as its primary export hub and increased production at the plant. Before then, China’s annual vehicle shipments to overseas markets hovered around 1 million for almost a decade.
That year, China’s car shipments soared 103% to 2.2 million units, surpassing South Korea’s to become the world’s third largest exporter. In 2022, China overtook Germany to become the world’s second largest car exporter after Japan.
Chinese carmakers are increasingly expanding overseas, particularly as the domestic economy lost momentum last year. In January 2023, Tesla cut prices in the country to attract customers and stem slowing growth.
The move triggered a price war among EV makers. Dozens of auto makers followed suit to stay competitive. The price war has driven up sales, but threatened industry-wide profitability.
That’s why international markets are so important. BYD sent a big delegation to a car show in Germany last September. A spokesman said at the time the company was aiming to double the number of dealer partners in Europe in 2023 and was targeting overseas sales of 250,000, up from about 56,000 in 2022.
Last month, BYD announced it would build an EV factory in Hungary, which would be its first passenger car plant in Europe. It already has a bus factory in Komárom, Hungary.
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
CNN’s Mayumi Maruyama contributed to reporting.