China to Surpass Japan as Global Auto Export Leader by 2023, Predicts Industry Group

Be sure to sign up for CNN's Meanwhile in China newsletter to stay updated on the country's rise and its global impact. According to a major industry group, China likely surpassed Japan as the world's top car exporter last year due to strong demand in Russia and a growing global interest in electric vehicles (EV).

According to the China Passenger Car Association (CPCA), the country is projected to have set a record in 2022 by exporting 5.26 million vehicles, including passenger cars, buses, and trucks. This marks a 56% increase from the previous year, with a total value of $102 billion. In comparison, Japan, the current market leader, is estimated to have exported 4.3 million cars during the same period, trailing behind by nearly one million.

The association announced on Tuesday that China has officially become the world's leading exporter. According to the CPCA, this rapid ascent to the top spot is due to China's exceptional electric vehicle industry, higher quality of Chinese-made cars, and the determination of domestic automakers to find greater profitability overseas while balancing cost pressures at home.

China exported 4.76 million car units in the first 11 months of 2023, while Japan exported 3.99 million units during the same period, as per customs data. The official annual figures from both countries are expected to be released in the next few weeks, which will confirm their rankings.

Rising Russia sales

In the first 11 months of the previous year, the number of vehicles shipped from China to Russia rose by 545% to 840,000 units compared to the previous year, making it the fastest growing market according to the latest Chinese customs data.

Russian car market experienced a surge of Chinese carmakers in 2023, capitalizing on the departure of global competitors following the Ukraine invasion in February 2022. Chinese EVs, known for their affordability compared to rival models, have gained traction in Europe, Australia, and Southeast Asia, marking a successful year for the Chinese automotive industry.

An employee at Chinese automaker Nio checks a car on an assembly line in Hefei, in China's eastern Anhui province, on May 10, 2023.

Hector Ramal/AFP/Getty Images

According to the CPCA, there was a 62% increase in passenger car exports in 2023 compared to 2022. More than 25% of these vehicles were electric. The export of all types of electric vehicles, including battery electric vehicles, plug-in hybrids, and hydrogen fuel cell vehicles, increased by 70%.

In December, BYD, the leader in the EV market, sent 36,095 vehicles out of China, with SAIC following at 19,427 units and Tesla (TSLA) shipping 18,334 units.

Chinese car exports soared in 2021, fueled by the country's increasing EV shipments. That year, Tesla designated its Shanghai Gigafactory as its main export hub and boosted production at the plant. Prior to that, China's annual vehicle exports to international markets had stayed around 1 million for nearly ten years.

In that year, China's car shipments increased by 103% to 2.2 million units, surpassing South Korea's to become the world's third-largest exporter. By 2022, China had overtaken Germany to become the world's second-largest car exporter after Japan.

Chinese car manufacturers are looking to expand more and more overseas, especially as the domestic economy slowed down last year. In January 2023, Tesla reduced prices in the country in an effort to attract customers and reverse the trend of slowing growth.

The introduction of the new product sparked a fierce competition for pricing among electric vehicle manufacturers. Numerous car companies quickly joined in to maintain their competitive edge. While the price war has led to increased sales, it has also posed a threat to the overall profitability of the industry.

The Xpeng X2 EV model at Beyond Expo in Macao on May 10, 2023

CNN

International markets are crucial, which is why BYD sent a large delegation to a car show in Germany last September. During the show, a spokesman announced the company's goal to double the number of dealer partners in Europe by 2023 and increase overseas sales to 250,000, up from about 56,000 in 2022.

In addition to their plans for increased market presence, BYD recently revealed their intentions to build their first passenger car plant in Europe, specifically in Hungary. This will complement their existing bus factory in Komárom, Hungary.

CNNs Mayumi Maruyama contributed to reporting.