18 policy measures have been released in six major areas to safeguard the "going global" of new energy vehicles and their supply chain enterprises.
On February 7th, the Ministry of Commerce and nine other departments issued the "Opinions on Supporting the Healthy Development of Trade Cooperation in New Energy Vehicles" (referred to as the "Opinions"). The Opinion states that the healthy development of trade cooperation in new energy vehicles will help promote the transformation and upgrading of the automotive industry, and play an important supporting role in stabilizing the scale and optimizing the structure of foreign trade; And it was mentioned that new energy vehicle and its supply chain enterprises are encouraged to efficiently utilize global innovation resources and establish research and development centers overseas in accordance with laws and regulations; Strengthen cooperation with relevant overseas enterprises according to local conditions, optimize export related procedures for new energy vehicles and power batteries, etc.
The impact of the new policy on automobile exports is multifaceted. Industry insiders have expressed that the new policy will help promote the growth of China's automobile exports, especially new energy vehicles, and further expand overseas markets; It will also be conducive to promoting the upgrading and development of China's automotive industry, and better integrating into the global automotive industry chain.
New policy benefits: reduced trade costs, enhanced brand competitiveness
The Opinion mentions optimizing transportation management, including optimizing export related procedures for new energy vehicles and power batteries, reducing processing time, and improving processing efficiency.
According to Bai Wenxi, Chief Economist of IPG China, the new policy is expected to reduce export costs, improve export efficiency, and enhance the competitiveness of China's new energy vehicles in the international market by optimizing export related links such as new energy vehicles and power batteries; This will help promote the export growth of China's automobiles, especially new energy vehicles, and further expand overseas markets.
Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, also believes that the new policy can effectively reduce trade costs.
The Opinion also mentions actively supporting enterprises to carry out business activities, such as encouraging places and industry organizations with conditions to hold brand promotion events in key overseas markets, and supporting enterprises to build globally renowned brands. Local trade promotion agencies and industry organizations support new energy vehicles and their supply chain enterprises to participate in domestic and international exhibition platforms such as the China International Import and Export Fair, shaping the image of Chinese manufacturing and expanding international cooperation space.
Brand promotion activities will help enhance the visibility and recognition of Chinese new energy vehicles in overseas markets, and strengthen brand influence, "said Zhan Junhao. In Bai Wenxi's view, this will help enhance the visibility and influence of Chinese automobile brands, and strengthen their competitiveness in overseas markets; Brand promotion can help more overseas consumers understand China's automotive products, thereby promoting the growth of China's automotive exports.
In addition, the Opinion also mentions encouraging overseas R&D cooperation and strengthening cooperation with relevant overseas enterprises according to local conditions; Guide new energy vehicle and its supply chain enterprises to leverage their own advantages, engage in technological cooperation in relevant countries, and build an industry chain supply chain system that is jointly built and shared by all parties. Regarding this, Bai Wenxi stated that it will help Chinese automotive companies better integrate into the global automotive industry chain and enhance the international competitiveness of China's automotive industry. Through cooperation with overseas enterprises, resources, technology, and markets can be shared to promote the upgrading and development of China's automotive industry.
International status: Last year, China's new energy vehicle exports increased by over 70% year-on-year, becoming a new growth pole for automobile exports
As one of the "new three types" of foreign trade, China's exports of new energy vehicles have grown rapidly.
According to data released by the China Association of Automobile Manufacturers, in 2023, China's automobile exports reached 4.91 million units, a year-on-year increase of 57.9%, and the contribution rate of exports to the growth of total automobile sales reached 55.7%. After surpassing South Korea with over 2 million vehicles in 2021 and surpassing Germany with over 3 million vehicles in 2022, it will surpass Japan for the first time to become the world's number one in 2023.
Cui Dongshu, Secretary General of the National Passenger Car Market Information Joint Committee, stated that China's automobile exports have surged to become the world's number one, mainly due to the international market demand of over 60 million yuan worldwide; The improvement of the quality and intelligence of Chinese domestic brand fuel vehicles has enhanced their competitiveness, coupled with leading the international trend of pure electric vehicles, bringing new blue oceans to overseas markets.
In 2023, China's new energy vehicle exports reached 1.203 million units, a year-on-year increase of 77.6%, accounting for 24.5% of the total automobile exports and becoming a new growth pole for China's automobile exports. In terms of classification, the export of pure electric vehicles reached 1.102 million units, a year-on-year increase of 80.9%; The export of plug-in hybrid vehicles was 101000 units, a year-on-year increase of 47.8%.
In 2023, among the top ten companies in terms of vehicle exports, BYD exported 252000 vehicles in terms of growth rate, a year-on-year increase of 3.3 times; Chery exported 925000 vehicles, a year-on-year increase of 100%; Great Wall Motors exported 316000 vehicles, a year-on-year increase of 82.5%.
In terms of export regions, the top three markets for new energy vehicle exports from January to November 2023 are Belgium, Thailand, and the United Kingdom.
Internationalization is a major highlight of China's new energy vehicle industry in 2023. For the system planning of going global, it has become a top priority in the planning of many car companies.
On January 25th of this year, BYD Uzbekistan factory started the production of new energy vehicles, producing two models: the destroyer and the Song. On January 30th, BYD and the government of Szeged, Hungary officially signed a land pre purchase agreement for a passenger car factory, which will build its first European new energy passenger car factory in Hungary, mainly producing passenger car models for sale in Europe. In addition, according to BYD's plan, the Thailand factory has an annual production capacity of about 150000 vehicles, and the Brazil new energy passenger vehicle production factory plans to have an annual production capacity of 150000 vehicles.
Under the overseas strategic plan of "embracing all rivers", Changan Automobile has formulated the "Four Ones" development goals, and "new forces" such as Xiaopeng and Zero Run are also actively expanding into developed regions such as Europe.
Zhang Yongwei, Vice Chairman and Secretary General of the China Electric Vehicle Hundred People's Association, predicts that China's new energy vehicle exports are expected to reach 1.8 million units by 2024, a year-on-year increase of 50%. And the export destinations not only include Russia, but also widely cover traditional automotive powerhouses such as Germany and Japan.
Export mode: Internationalization cannot rely solely on trade exports, car companies are exploring new paths of building factories overseas
Although China has become the world's largest exporter of automobiles, with the continuous growth of export volume, Chinese cars are facing more and more complex challenges when going global.
At the end of 2023, France announced a list of electric vehicle models that can receive up to 7000 euros in government subsidies, with 78 models on the list. However, the top five best-selling models in France, SAIC MG 4, as well as Chinese produced Tesla Model 3 and Dacia Spring, were not included in the list. In 2023, the European Union will initiate a countervailing investigation into electric vehicles produced in China, selecting three Chinese car companies, BYD, Geely, and SAIC, through sampling.
In the view of Xu Haidong, Deputy Chief Engineer of the China Association of Automobile Manufacturers, trade exports are only a small part of automobile exports, and true internationalization requires direct production in these target markets overseas. He further stated that Japan's overseas production in 2023 may reach 17.8 million vehicles, and there are not many exports from Germany and the United States using direct trade models, with more exports being produced overseas; In these aspects, China is still in a backward state.
Zhang Junyi, Managing Partner of Aowei Consulting, also holds the same view that currently there are more trade exports and fewer local factories, and it will still take some time to achieve high-quality exports. Industry insiders including Xu Haidong generally believe that compared to developed countries in the automotive industry such as Japan and Germany, Chinese car companies are still in the initial stage of export layout. Most car companies still focus on exporting finished products, while a small number have begun to carry out localization production, on-site matching, on-site sales, and peripheral market radiation. In Zhang Junyi's view, exports are divided into two concepts: product exports and cross regional investments. Chinese car companies need to be cautious when exporting overseas, and how to operate in overseas markets should be both aggressive and not too radical.
Bai Wenxi stated that currently, the main mode of China's automobile exports is still vehicle exports, which has the advantage of visually showcasing the quality and performance of Chinese automobile products. However, there are also challenges such as high transportation costs and customs taxes.
At present, there are two modes for the export of new energy vehicles in China. One is the trade export mode, and the other is the 'sales real estate' mode of investing, building factories, producing and selling locally. Zhang Yongwei believes that the highlight of China's internationalization of new energy vehicles next year is the increasing proportion of overseas production and sales.
"Overseas production is the main way to resolve the contradiction of overseas development." In Zhang Yongwei's view, the international development of automobiles cannot take the photovoltaic road.
Due to various factors, while accelerating the export of complete vehicles, car companies are also accelerating the pace of building factories overseas. For example, BYD announced that it will build a new energy vehicle production base in Szeged, Hungary, which will be constructed in stages. SAIC Group also revealed its plan to invest in the construction of new energy vehicle factories in Europe; Changan Automobile also mentioned the need to accelerate its layout in Europe, and the establishment of its European headquarters is currently under preparation; Great Wall Motors has also begun to advance the site selection work for its European factories.
In addition, new forces in car manufacturing are also accelerating the construction of factories in overseas markets. Last September, NIO Energy's European factory located in Pest State, Hungary, was officially put into operation; In January of this year, Nezha Automobile's third overseas factory settled in Malaysia. Prior to this, it had established production bases in Thailand and Indonesia and planned to start production this year.
Intensify research and development in overseas markets, find suitable partners, and establish localized production and sales networks, "said Zhan Junhao." Automobile companies should flexibly adjust their strategies to adapt to the constantly changing international trade situation
Regarding the development of Chinese car brands in overseas markets, Zhang Junyi stated that car companies should not only engage in simple trade exports, but also carry out local localization, starting from the manufacturing and supply chain ends, and deeply cultivate in the local area.
