▲Trends in Chinese automobile exports (Image source: Korea Automobile Manufacturers Association)

China's auto exports to reach 3.11 million units in 2022, up 54.4% year-on-year.
China accounts for 50% of electric vehicle exports, with Tesla's Shanghai factory producing the majority.

As China becomes the world's second-largest auto exporter after Japan, concerns are rising that competition between Korean companies and the local market will intensify.

On the 25th, the Korea Automobile Manufacturers Association released a report titled "2022 China Automobile Global Market Export Status and Implications."

According to the report, China's automobile exports last year increased by 54.4% year-on-year to 3.11 million units, making China the world's second-largest automobile exporter, surpassing Germany, which exported 2.61 million units, and South Korea, which exported 2.3 million units.

In particular, among China's exports, new energy vehicles (BEV, PHEV, FCEV) recorded a growth rate of more than two-fold, reaching approximately 680,000 units, a 120% increase over the previous year.

China's automobile exports have remained stagnant at around 1 million units for the past five years, but have continued to increase since surging more than 100% in 2021.

Half of China's electric vehicle exports are produced by Tesla in its Shanghai factory. As of the first half of 2022, Tesla exported 97,182 units to China, accounting for 48% of China's 202,000 new energy vehicle exports in the first half.

Top 10 best-selling electric vehicle models worldwide as of May last yearSeven of the models are from Chinese companies such as BYD and SAIC, indicating that Chinese automakers are continuing to increase their electric vehicle exports.

Previously, China's automobile exports were concentrated in regions with low per capita incomes or political proximity, such as Russia, Iran, and Central and South America. However, China has recently expanded its presence in the European market, led by new energy vehicles, and is also increasing its market share in existing markets based on improved product quality.

In 2016, China's major automobile export destinations were Iran, India, Vietnam, the United States, and Egypt, but in 2022, they were Belgium, Chile, Australia, the United Kingdom, and Saudi Arabia. As China's exports of new energy vehicles increase, export destinations have diversified to Europe, Oceania, and other countries.

The average export price of Chinese automobiles also rose by approximately 30% from $12,900 in 2018 to $16,400 last year, showing a continued trend toward higher added value.

According to Chinese customs, European countries such as Belgium and the UK accounted for 70% of China's total electric vehicle exports.

In addition, the trend of export expansion by Chinese companies to meet the demand for not only electric passenger cars but also medium and large commercial vehicles such as electric buses continues.

The domestic market share of Chinese electric buses reaches 50%, and in the European market, BYD and Yutong Bus account for 30.4% of the electric bus market share.

Also, after the Russo-Ukrainian War, global manufacturers such as Korea, Japan, and EuropeThe vacancy was filled by Chinese cars (Haval, Geely, Chery), which accounted for 31% of the Russian market share as of January-November 2022, and in Saudi Arabia, three of the top 10 brands in terms of sales were Chinese brands (Geely, Changan, MG).

As China concludes FTAs with major export destinations and expands exports to those countries, some are suggesting that Korea should also improve its export competitiveness.

In particular, to develop new markets, it appears necessary to quickly conclude new FTAs with markets with high future growth potential, such as the Middle East and Central and South America.

Kang Nam-hoon, chairman of the Korea Automobile Manufacturers Association, said that half of China's electric vehicle exports are Tesla products, and emphasized, "It is urgent to establish comprehensive incentive policies to attract foreign-invested companies such as GM Korea and Renault Korea to build electric vehicle production facilities in Korea and to expand investment in electric vehicle facilities by domestic companies." He also emphasized, "We must enhance our country's automobile export competitiveness through strategies to strengthen the domestic automobile industry's production base and competitiveness, such as swiftly enacting the 'Future Vehicle Special Act' to transform the industrial structure toward future vehicles and securing labor flexibility."