LIANYUNGANG, CHINA – JANUARY 17, 2024 – A large number of cars are ready to be shipped for export at the port of Lianyungang, Jiangsu province, China, January 17, 2024. (Photo credit should read CFOTO/Future Publishing via Getty Images)Future Publishing | Future Publishing | Getty ImagesBEIJING — China was not able to surpass Japan as the world’s largest car exporter in 2023, coming very close to achieving this, according to data released this month. Japanese customs data showed the country exported 5.97 million vehicles last year, which was more than the 5.22 million vehicle exports reported by China customs data. Over 70% of China’s car exports in 2023 were gasoline-powered vehicles, as stated by the Ministry of Commerce, which noted that new energy vehicle exports were increasing rapidly. Economist Sarah Tan from Moody’s Analytics mentioned that many of the gasoline-powered cars were sent to Russia. She highlighted that after Russia’s invasion of Ukraine in February 2022, numerous auto manufacturers left the country, leaving a gap that was filled by Chinese manufacturers. In the first eleven months of 2023, auto shipments to Russia increased about six times in value compared to 2022. Mexico was also a significant destination for Chinese exports of gasoline-powered cars, while auto exports to Belgium and the U.K. were mainly new energy vehicles. According to Jorge Guajardo, Washington, D.C.-based partner at Dentons Global Advisors and a former ambassador of Mexico to China, the share of Chinese-made cars in Mexico’s auto market has rapidly grown, which is a new development considering that Mexico has traditionally been highly protective of its auto industry. He suggested that international automakers are part of the reason for this growth, as they have redirected the capacity from plants in China that were originally meant for the Chinese market. China’s penetration of new energy vehicles reached 40% of new passenger car sales towards the end of 2023, significantly higher than the around 7% in the U.S. An analysis by CNBC revealed that the swift transition to electric cars is reducing market share from international auto giants, with Germany’s Volkswagen among the foreign car companies experiencing a decline in China market sales. Chinese company BYD also surpassed Tesla in overall vehicle production in 2023, producing over 3 million vehicles and selling more battery-powered cars than the U.S. automaker in the fourth quarter. BYD’s overseas sales in 2023 exceeded 242,000 new energy passenger vehicles. It is anticipated that Chinese car makers will increase their share of the domestic auto market to 75% by 2030, resulting in a nearly 40% drop in European car sales in China. As China-made electric cars also make their way to Europe, the European Union has initiated an investigation into the role of government subsidies for production of these electric vehicles. Guajardo predicts that these developments will lead to trade wars, especially in the case of Chinese car sales to Mexico. He expressed the desire for the focus to be on electric vehicles as they are superior and environmentally friendly, as opposed to gasoline-powered cars.
