How did Chinese-made cars rise to the world market? Through the United States and South Korea…

When it comes to car production, countries like Japan, Germany, USA and South Korea come to mind. These countries are also among the largest exporters of cars in the world. However, there is another country on this list that no one thought of even years ago. Although only a few thousand Chinese-made cars were sold in the 1980s, the country is now on track to become the No. 2 exporter of cars. Cars of Chinese origin are gaining more and more market share in the world.

THE USE OF CARS MADE IN CHINA IS INCREASING IN EUROPE

An increasing number of Chinese brands are also becoming favorites of European consumers. The fact that car sales from China to the European Union increased by 156 percent in 2021 to 435 thousand units, according to Eurostat data, is an indication of this.

Andreas Tatt, a manager at a company that makes greeting cards in England, was planning to buy a new electric car. After thinking about the popular electric cars in the market, he decided to buy a Polestar car, which is a small Chinese brand Gelly and whose name is not well known. “My car gets a lot of attention because of the color and the fact that people don’t know about this brand,” Tatt says. Many Europeans, like Tatt, have also begun to shun Chinese automakers.

Chinese manufacturers, especially companies such as Geely, BYD, NIO, Xpeng, Li Auto and Aiways, increased their exports. Geely, which includes many brands, also attracted attention by buying Sweden’s Volvo, while BYD received an investment from Berkshire Hathaway, owned by Warren Buffett, one of the world’s richest men.

RISE TO 2ND RANGE IN CHINA CAR EXPORTS

According to published data, shipments of Chinese-made vehicles have tripled since 2020, surpassing 2.3 million in 2022 (as of November). China has become the 3rd largest exporter of cars, just behind Germany, whose sales have fallen in recent years. Germany, on the other hand, exported about 2.4 million cars during the period. China, which is also behind the leader Japan (which sold 3 million cars in 2022), is ahead of the established automakers of the USA (847 thousand units) and South Korea (about 2 million units).

One of China’s strong points in the world car market is electric cars. Instead of mastering complex internal combustion engines, China’s domestic manufacturers preferred to gain experience in electric vehicles. Alexander Klose, a manager at Aiways Automobiles, a Chinese electric car maker, said the focus on electric vehicles puts Chinese manufacturers on par with their competitors. “The switch to the electric motor means that engine emissions no longer make a difference. It has created a technologically even playing field” he says.

CHINA GOVERNMENT ELECTRIC VEHICLE FIRE

International pressure to reduce carbon emissions is also prompting Beijing to encourage manufacturers and buyers of electric vehicles with subsidies. Additionally, a strong domestic supply chain has made it cheaper to manufacture an electric car in China than elsewhere.

Not only Chinese manufacturers can benefit from these incentives, but also foreign companies such as Tesla. Tesla’s Shanghai factory produced about 711,000 vehicles last year, which is equivalent to 52 percent of the company’s worldwide production. A sub-genre of the French Renault brand, the Romanian Dacia Spring model and the German BMW iX3 electric car are also manufactured in China.

The incentives provided by the Chinese government led to the birth of many international companies. The Beijing government is also encouraging its citizens to buy electric cars. BYD alone sold 1.8 million electric or hybrid vehicles in the Chinese market last year. This number was more than 1.3 million Tesla sales worldwide. Tesla CEO Elon Musk also says that his biggest rival could be Chinese companies.

Sources: Bloomberg, Insider