In recent years, improvements in product quality, brand image, and after-sales service have contributed to steady growth in China's auto exports. Last year, China surpassed Germany to become the world’s second-largest auto exporter, with 3.2 million vehicles shipped. With a strong performance in the first quarter of 2023, China has now overtaken Japan as the world's top auto exporter and is expected to maintain this position moving forward.
China became the world’s largest auto exporter in the first quarter, driven by rising demand for electric vehicles and increased shipments to Russia. The shift toward electric vehicles has fueled China’s export growth, with new energy vehicles (NEVs) accounting for about 40% of total auto exports. NEV exports, including electric cars, increased by more than 90% compared to the same period last year. European automakers may face growing competition from Chinese brands, while companies involved in supply chains and logistics could benefit from the surge in exports.
One of the primary factors behind China’s rising auto exports is the increasing global demand for electric vehicles, particularly from Europe and Japan. NEV exports from China have surged by over 90% year-on-year, reflecting strong international interest in Chinese-made EVs.
At the Shanghai Auto Show in April 2023, companies showcased a wide range of vehicles targeted at overseas markets, including Southeast Asia, South America, and Africa. Several foreign dealers expressed strong interest in Chinese electric cars. Some Chinese brands, such as Jetway and Zeekr, have already started taking pre-orders in Europe and plan to expand across Western Europe by 2026.
China’s rapid expansion in electric vehicle exports has significant implications for the European economy. As more Chinese automakers announce export plans and domestic subsidies for EV purchases are phased out, exports to Europe are expected to rise. The region presents an attractive market due to low trade barriers, an extensive charging infrastructure, and government incentives for EV adoption.
Chinese-made EVs could reshape trade dynamics between China and Europe. The EU is becoming a key consumer of Chinese-made cars, particularly in the electric vehicle sector, which is poised to be the future of the automotive industry. If European automakers begin using China as an export hub for third-party markets, it could reduce production within Europe itself.
This shift could have significant consequences for Europe's industrial sector. The automotive industry has long been a critical component of the European economy, accounting for 10% of EU exports and a third of the EU’s trade surplus in 2019. Additionally, the sector represents 7% of Europe’s GDP and 10% of its manufacturing jobs. The rise of Chinese-made cars in the European market may pose challenges to employment, investment, and technological development in the region.
The Netherlands, a key hub for international trade and transport, could see a substantial impact from these developments. As one of Europe’s main transit countries, its ports play a crucial role in the global automotive supply chain. Dutch companies involved in supplying parts and technology to Chinese automakers may benefit from rising demand, while European manufacturers may face increased competition.
China's growing presence in the global auto industry, particularly in the EV segment, is reshaping market dynamics. The Chinese EV market is already dominated by local brands that have expanded aggressively. As Chinese automakers strengthen their foothold in Europe, they could challenge established manufacturers, particularly in the premium vehicle segment.
Moreover, Europe’s auto industry relies heavily on cross-border supply chains, with around one-third of any member state's production sourced from other EU countries. This means that not only major exporters like Germany are affected, but also smaller economies integrated into the supply chain. Additionally, a strong domestic EV industry is crucial for sustaining the battery sector, which plays a key role in Europe's broader industrial strategy.
China's rise in the global auto market is reshaping international trade, with potential long-term consequences for both European automakers and global supply chains.
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