Kung Chan and Xia Ri
“New quality productive force” is now a new buzzword in China, particularly associated with the nation’s car exports. China’s car exports, including new energy vehicles (NEVs), have indeed grown significantly, to the point where the U.S. is considering imposing policy restrictions on the country.
According to data from the China Association of Automobile Manufacturers (CAAM), from 2021, the export of complete vehicles has grown significantly, exceeding 2 million units for the first time that year, a year-on-year increase of 103%, making China the world’s third-largest exporter of automobiles. In 2022, complete vehicle exports exceeded 3 million units for the first time, reaching 3.3212 million units, a year-on-year increase of 56.8%. In 2023, this figure jumped to 4.91 million units, a year-on-year increase of 57.9%, surpassing Japan.
Among them, the export growth of NEVs is especially rapid. CAAM data shows that in 2020, China’s export of NEVs was nearly 70,000 units, accounting for only 7.0% of the total automobile exports. In 2021, the export of NEVs reached 310,000 units, a threefold increase year-on-year. In 2022, the export reached 679,000 units, an increase of 120% year-on-year. In 2023, the export volume reached 1.203 million units, a year-on-year increase of 77.6%. So, what factors have led to the significant growth of China’s car exports and even been considered as the “new quality productive force” that can replace real estate?
Through his long-term information tracking and research, ANBOUND’s founder Kung Chan believes that this is mainly due to the combined effects of three factors: the entry of emerging market economies into the era of automobiles, unprecedented demand growth in the Russian market, and rapid technological progress in China’s NEVs.
First of all, emerging market economies have entered the era of automobiles. Against the backdrop of deglobalization and the ongoing U.S.-China trade dispute, emerging market economies have become beneficiaries of industrial transfer, with rapid economic development, especially in the Asia-Pacific region where economic growth has been particularly impressive.
According to the Asian Development Bank (ADB)’s Asian Development Outlook December 2023, the developing economies in the Asia-Pacific region are expected to grow by 4.9% in 2023, up 0.2 percentage points from the September forecast. Subregion-wise, South Asia is expected to grow by 5.7% this year, East Asia by 4.7%, Southeast Asia by 4.3%, Central Asia and the Caucasus by 4.8%, and the Pacific island countries by 3.5%. With the rise of the people’s income, emerging market economies have entered the era of automobiles, promoting the export of low-cost cars produced in China.
According to data, in terms of exports from China in 2023, Mexico ranked second with exports of 415,100 vehicles, an increase of 62% year-on-year; Brazil exported 114,800 vehicles, an increase of 222% year-on-year; Turkey exported 110,600 vehicles, an increase of 267% year-on-year. Malaysia exported 83,300 vehicles, an increase of 114% year-on-year. Thailand exported 170,600 vehicles, an increase of 92% year-on-year; Kyrgyzstan exported 76,000 vehicles, an increase of 2782% year-on-year; Uzbekistan exported 117,400 vehicles, an increase of 257% year-on-year; and Kazakhstan exported 99,200 vehicles, an increase of 248% year-on-year.
The second factor is the unprecedented surge in demand in the Russian automobile market. Since the Russia-Ukraine conflict in 2022, Western countries have imposed unprecedented severe sanctions on Russia, leading to the withdrawal of many European and American car manufacturers from the Russian market, and even a shrinkage in the sales of Japanese and South Korean cars. Among them, multinational car companies such as Volvo, General Motors, Ford, BMW, Mercedes-Benz, Volkswagen, Renault, Toyota, Honda, and Nissan have suspended the export of new cars to Russia, and Mercedes-Benz and Volkswagen have also gradually halted production in Russian factories. As a result, the Russian automobile market has faced shortages of both vehicles and components. Chinese car companies have seized the opportunity and quickly entered the Russian market to fill the gap. In 2022, the market share of Chinese car brands in Russia increased from 9% to 37%. In 2023, the export volume of automobiles to Russia surged to become the top destination for Chinese exports for the whole year, becoming the largest destination for Chinese car exports. Among them, six Chinese car brands entered the top 10 in sales in Russia. Data shows that in 2023, the highest-selling brand in the Russian market was the Russian domestic brand Lada, with an annual sales volume of 324,446 vehicles. Chinese brands occupied the second to seventh positions, surpassing South Korean brands Kia and Hyundai, as well as Japanese brand Toyota. Chery ranked first among Chinese brands with an annual sales volume of 118,950 vehicles and a market share of 11.2%. Haval followed with a sales volume of 111,720 vehicles. Other brands that entered the top ten included Geely (93,553 vehicles), Changan (47,765 vehicles), Exeed (42,152 vehicles), and Omoda (41,983 vehicles). In terms of market share, as of the end of December 2023, Chinese passenger cars accounted for 76.1% of new car imports to Russia. Boris Titov, Chairman of the Russia-China Friendship, Peace, and Development Committee, stated that in terms of value, China’s passenger car exports to Russia increased by 543% in 2023, and Chinese cars now account for more than half of the Russian market, reaching 53%. In terms of inventory, as of the end of 2023, there were 3,600 distribution centers in Russia, with 2,300 of them selling Chinese cars. In terms of growth, in 2023, the Russian automobile market added 1,568 new distribution centers, with 1,400 of them selling Chinese cars.
Finally, there has been rapid technological advancement in China’s NEVs. As the epicenter of the world’s emerging automotive industry, China has made significant progress in technology, akin to the situation of South Korean automobiles in the past. Breakthroughs have been achieved in batteries, engines, and smart technology, with the remaining tasks being the design of vehicle models and the establishment of a global network. In other words, this marks a significant period of development. As of the end of 2023, Chinese applicants have consistently ranked first in the world for international patent applications filed through the Patent Cooperation Treaty for four consecutive years. China’s global patent applications for solar cells reached 126,400, ranking first in the world. The top 10 Chinese enterprises in the sales of NEVs have over 100,000 valid patents globally, ranking among the top in the world. Technological innovation and breakthroughs are crucial for the development of NEVs.
In terms of power batteries, the industry is accelerating its transformation towards semi-solid-state and solid-state batteries. In 2023, BYD introduced blade batteries; CATL also launched Qilin batteries and Shenxing ultra-fast charging batteries, among other products. Honeycomb Energy introduced “short-blade” batteries; NIO showcased self-developed large cylindrical batteries; and Zeekr showcased self-developed “Golden Brick” batteries. As for NEV motors, China has progressed from early 10,000 rpm to 20,000 rpm motors installed in vehicles, overcoming a series of design and material limitations in the process. Since the second half of 2023, brands such as Zeekr, Luxeed, Xiaomi Auto, and Aion have successively released motors with speeds exceeding 20,000 rpm. In January 2024, GAC Aion’s Ruipai Intelligent Eco-drive factory officially completed construction and production, with the mass production of the M25 electric drive with a maximum speed of 22,000 rpm. Geely’s subsidiary InfiMotion has developed the latest Speed high-speed motor, with a maximum speed of 24,000 rpm. With the intensification of competition in the automotive market, intelligentization is also advancing rapidly. It is widely believed in the industry that urban NOA (navigation on autopilot) is the closest to L3 (level 3 autonomy) and is a crucial step in transitioning from L2 to L3. Based on this, major automakers have attempted to deploy urban NOA in 2023. Several brands including XPeng, Li Auto, Avatr, IM Motors, and Huawei’s AITO are all planning upgrades from high-speed NOA to urban area NOA.
Final analysis conclusion:
The emerging “new quality productive force”, seen as an alternative to real estate, has led to significant growth in China’s automobile exports, including new energy vehicles, even when facing policy restrictions from the U.S. This is closely related to the combined effects of three factors: the entry of emerging market economies into the automobile era, the unprecedented surge in demand in the Russian market, and the rapid technological progress of China’s new energy vehicles. This reflects the fundamental situation of the current development of China’s automobile industry.
No comments:
Post a Comment